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DFARS Change Notice 20000413
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF DEFENSE
48 CFR Parts 213, 225, 242, and 252
[DFARS Case 98-D028]
Defense Federal Acquisition Regulation Supplement; Foreign Acquisition
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
SUMMARY: The Acting Director of Defense Procurement has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS). These amendments conform the DFARS to the Federal Acquisition Regulation (FAR) Amendments pertaining to foreign acquisition that were published in the Federal Register on December 27, 1999.
EFFECTIVE DATE: April 13, 2000.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition
Regulations Council, PDUSD (AT&L) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0288; telefax (703) 602-0350. Please cite DFARS Case 98-D028.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends DFARS Part 225, Foreign Acquisition, and updates related references, for conformance with the FAR Part 25 rewrite that was published at 64 FR 72416 on December 27, 1999 (Federal Acquisition Circular 97-15, Item II). The rule reorganizes the existing DFARS text to align it with the revised FAR text. The rule makes no substantive change to DFARS policy pertaining to foreign acquisition.
The following list summarizes the reorganization of the DFARS text:
This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
This final rule does not constitute a significant revision within the meaning of FAR 1.501 and Public Law 98-577 and publication for public comment is not required. However, DoD will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 98-D028.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 213, 225, 242, and 252
Government procurement. Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR parts 213, 225, 242, and 252 are amended as follows:
1. The authority citation for 48 CFR parts 213, 225, 242, and 252 continues to read as follows:
Foreign Acquisition
DFARS Case 98-D028
Final rule
PART 213-SIMPLIFIED ACQUISITION PROCEDURES
* * * * *
213.302-5 Clauses.
* * * * *
(d) When using the clause at FAR 52.213-4, delete the reference to the clause at FAR 52.225-3[1], Buy American Act-[Balance of Payments Program-]Supplies. * * *
* * * * *
PART 225-FOREIGN ACQUISITION
225.000-70 Definitions. 1
As used in this part-
(a) "Defense equipment" means any equipment, item of supply, component, or end product purchased by the DoD.
(b) "Domestic concern" means a concern incorporated in the United States or an unincorporated concern having its principal place of business in the United States.
(c) "Domestic end product" has the meaning given in the clauses at 252.225-7001, Buy American Act and Balance of Payments Program; 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; and 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program, instead of the meaning in FAR 25.101.
(d) "Foreign concern" means any concern other than a domestic concern.
(e) "Nondesignated country end product" means any end product which is not a U.S. made end product or a designated country end product.
(f) "Nonqualifying country" means a country other than the United States or a qualifying country.
(g) "Nonqualifying country end product" means an end product which is neither a domestic nor qualifying country end product.
(h) "Nonqualifying country offer" means an offer of a nonqualifying country end product, including the price of transportation to destination.
(i) "Qualifying country" is a term used to describe certain countries with memoranda of understanding or international agreements with the United States. These countries are listed in 225.872-1.
(j) "Qualifying country component" and "qualifying country end product" are defined in the clauses at 252.225-7001, Buy American Act and Balance of Payments Program; 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; and 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program. "Qualifying country end product" is also defined in the clause at 252.225-7021, Trade Agreements.
(k) "Qualifying country offer" means an offer of a qualifying country end product, including the price of transportation to destination.
(l) "Source," when restricted by such words as foreign, domestic, qualifying country, etc., refers to the actual manufacturer or producer of the end product or component.
(m) "U.S. made end product" is defined in the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program, and 252.225-7021, Trade Agreements.
225.000-71 General guidelines.
To apply the policies and procedures of this part, analyze and evaluate offers of foreign end products generally as follows-[:]
(a[1]) Statutory or policy restrictions.
(1[i]) Determine whether the product is restricted by-
(i[A]) Defense authorization or appropriations acts (see Subpart 225.70); or
(ii[B]) DoD policy (see Subpart 225.71 and FAR 6.302-3).
(2[ii]) Where an exception to or waiver of a restriction would result in award of a foreign end product, apply the policies and procedures of the Buy American Act or the Balance of Payments Program, and, if applicable, the trade agreements.
(b[2]) Memoranda of understanding or other international agreements.
(1[i]) Determine whether the offered product is the product of one of the countries (qualifying country), listed in 225.872-1.
(2[ii]) If the product is the product of a qualifying country, evaluate the offer under [Subpart] 225.105 and 225.872-4.
(c[3]) Trade agreements.
(1[i]) Determine whether the product is covered by the Trade Agreements Act or the North American Free Trade Agreement Implementation Act (see Subpart 225.4).
(2[ii]) If the product is an eligible product under Subpart 225.4, evaluate the offer under FAR 25.402, 225.105, and 225.402[Subpart 225.5].
(3[iii]) If the product is not an eligible product, a qualifying country end product, or a U.S. made end product, purchase of the foreign end product may be prohibited (see FAR 25.402[3](c) and 225.402[3](c).
(d[4]) Contractors controlled by terrorist nations.
(1[i]) Determine whether the contractor is controlled by a terrorist nation.
(2[ii]) If the contractor is controlled by a terrorist nation, comply with
209.104-1(g).
(e[5]) Buy American Act and Balance of Payments Program. See the evaluation procedures in [Subpart] 225.105.
[225.003 Definitions. 2
As used in this part-
(1) "Caribbean Basin country end product" includes petroleum or any product derived from petroleum.
(2) "Defense equipment" means any equipment, item of supply, component, or end product purchased by the DoD.
(3) "Domestic concern" means a concern incorporated in the United States or an unincorporated concern having its principal place of business in the United States.
(4) "Domestic end product" has the meaning given in the clauses at 252.225-7001, Buy American Act and Balance of Payments Program; 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; and 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program, instead of the meaning in FAR 25.003.
(5) "Eligible product" means, instead of the definition at FAR 25.003, a designated, NAFTA, or Caribbean Basin country end product in the categories listed in 225.401-70.
(6) "Foreign concern" means any concern other than a domestic concern.
(7) "Nondesignated country end product" means any end product which is not a U.S. made end product or a designated country end product.
(8) "Nonqualifying country" means a country other than the United States or a qualifying country.
(9) "Nonqualifying country end product" means an end product which is neither a domestic nor qualifying country end product.
(10) "Nonqualifying country offer" means an offer of a nonqualifying country end product, including the price of transportation to destination.
(11) "Qualifying country" is a term used to describe certain countries with memoranda of understanding or international agreements with the United States. These countries are listed in 225.872-1.
(12) "Qualifying country component" and "qualifying country end product" are defined in the clauses at 252.225-7001, Buy American Act and Balance of Payments Program; 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; and 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program. "Qualifying country end product" is also defined in the clause at 252.225-7021, Trade Agreements.
(13) "Qualifying country offer" means an offer of a qualifying country end product, including the price of transportation to destination.
(14) "Source," when restricted by such words as foreign, domestic, qualifying country, etc., refers to the actual manufacturer or producer of the end product or component.]
SUBPART 225.1--BUY AMERICAN ACT--SUPPLIES
225.102[3] Policy[Exceptions].
(a)(2) The cost of a domestic end product is unreasonable if it is not the low evaluated offer when evaluated under 225.105. 3
(3[i])(A) Specific public interest exceptions for DoD for certain countries are in 225.872.
(B) The Under Secretary of Defense (Acquisition[,] and Technology[, and Logistics]) has determined that, for procurements subject to the Trade Agreements Act, it is inconsistent with the public interest to apply the Buy American Act to information technology products in Federal Supply Group 70 or 74 that are substantially transformed in the United States.
[(ii)](C[A]) Normally, use the evaluation procedures in [Subpart] 225.105, but consider recommending a public interest exception where the purposes of the Buy American Act are not served, or in order to meet a need set forth in 10 U.S.C. 2533. For example, a public interest exception may be appropriate-
(1) If accepting the low domestic offer will involve substantial foreign expenditures, or accepting the low foreign offer will involve substantial domestic expenditures;
(2) To ensure access to advanced state-of-the-art commercial technology; or
(3) To maintain the same source of supply for spare and replacement parts (also see paragraph (b)(iii)(B) of this section)-
(i) For an end item that qualifies as an American good; or
(ii) In order not to impair integration of the military and commercial industrial base.
(D[B]) A determination whether to grant a public interest exception shall be made after consideration of the factors in 10 U.S.C. 2533-
(1) At a level above the contracting officer for acquisitions valued at less than $100,000;
(2) By the head of the contracting activity for acquisitions valued at $100,000 or more but less than $1,000,000; or
(3) By the agency head for acquisitions valued at $1,000,000 or more.
(b)(i) A determination that an article, material, or supply is not reasonably available is required where no domestic offer is received or when domestic offers are insufficient to meet the requirement and award is to be made on a nonqualifying country end product.
(ii) Except as provided in FAR 25.102[3](b)(1[2)(i]), the determination must be approved-
(A) At a level above the contracting officer, if the acquisition is estimated not to exceed $25,000;
(B) By the chief of the contracting office if the acquisition is estimated not to exceed $250,000;
(C) By the head of the contracting activity (HCA) or immediate deputy if the acquisition is estimated not to exceed $2 million; or
(D) By the head of the agency, or designee at a level no lower than an HCA, if the acquisition is estimated to exceed $2 million.
(iii) A determination as to whether an article, material, or supply is reasonably available is not required for-
(A) End products or components listed in 225.10 8(d)(1) [4(a)(iii)] or FAR 25.108(d)(1)[4(a)];
(B) Acquisitions for spare/replacement parts when the acquisition is restricted to the original manufacturer or supplier; or
(C) Acquisition of foreign drugs by the Defense Supply Center, Philadelphia, when the Chief of the Technical Operations Division, Directorate of Medical Materiel, determines that only the requested foreign drug will fulfill the requirements.
(iv) Under coordinated acquisition (see [Subpart] 208.70), the determination is the responsibility of the requiring department when the requiring department specifies acquisition of a foreign end product.
[(c) The cost of a domestic end product is unreasonable if it is not the low evaluated offer when evaluated under Subpart 225.5.]4
225.103 Agreements with certain foreign governments.
See 225.872.
[225.104 Nonavailable articles. 5
(a)(i) DoD has determined that the articles, materials, and supplies listed in FAR 25.104(a) and in paragraph (a)(iii) of this section, when purchased as end items or components, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality. Regard these items or components as being of domestic origin when incorporated in-
(ii) Scrap is domestic in origin if generated in, collected in, and prepared for processing in the United States.
(iii)(A) Aluminum clad steel wire.
(B) Sperm oil.]
225.105 Evaluating offers.6
Use the following procedures instead of those in FAR 25.105. These procedures do not apply to acquisitions of information technology end products in Federal Supply Group 70 or 74 that are subject to the Trade Agreements Act.
(1) Treat offers of eligible end products under acquisitions subject to the Trade Agreements Act or NAFTA as if they were qualifying country offers. As used in this section, the term "nonqualifying country offer" may also apply to an offer that is not an eligible offer under a trade agreement (see Example 4 in Table 25-1, Evaluation).
(2) Except as provided in paragraph (3) of this section, evaluate offers by adding a 50 percent factor to the price (including duty) of each nonqualifying country offer (see Example 1 in Table 25-1, Evaluation).
(i) Nonqualifying country offers include duty in the offered price. When applying the factor, evaluate based on the inclusion of duty, whether or not duty is to be exempted. If award is made on the nonqualifying country offer and duty is to be exempted through inclusion of the clause at FAR 52.225-10, Duty-Free Entry, award at the offered price minus the amount of duty identified in the provision at 252.225-7003, Information for Duty-Free Entry Evaluation. See Example 1, Alternate II, in Table 25-1, Evaluation.
(ii) When a nonqualifying country offer includes more than one line item, apply the 50 percent factor-
(A) On an item-by-item basis; or
(B) On a group of items, if the solicitation specifically provides for award on a group basis.
(3) When application of the factor would not result in the award of a domestic end product, i.e., when no domestic offers are received (see Example 3 of Table 25-1, Evaluation) or when a qualifying country offer is lower than the domestic offer (see Example 2 of Table 25-1, Evaluation), evaluate nonqualifying country offers without the 50 percent factor.
(i) If duty is to be exempted through inclusion of the clause at FAR 52.225-10, Duty-Free Entry, evaluate the nonqualifying country offer exclusive of duty by reducing the offered price by the amount of duty identified in the clause at 252.225-7003, Information for Duty-Free Entry Evaluation (see Examples 2 and 3, Alternate II, of Table 25-1, Evaluation). If award is made on the nonqualifying country offer, award at the offered price minus duty.
(ii) If duty is not to be exempted, evaluate the nonqualifying country offer inclusive of duty. (See Examples 2 and 3, Alternate I, of Table 25-1, Evaluation.)
(4) If these evaluation procedures result in a tie between a nonqualifying country offer and a domestic offer, make award on the domestic offer.
(5)(i) There are two tests that must be met to determine whether a manufactured item is a domestic end product-
(A) The end product must have been manufactured in the United States; and
(B) The cost of its U.S. and qualifying country components must exceed 50 percent of the cost of all of its components. This test is applied to end products only, and not to individual components.
(ii) Because of the component test, the definition of "domestic end product" is more restrictive than the definition for-
(A) "U.S. made end product" under trade agreements;
(B) "Domestically produced or manufactured products" under small business set-asides or small business reservations; and
(C) Products of small businesses under FAR Part 19.
(iii) If an offer is for a "U.S. made end product," "domestically produced end product," or the product of a small business, but is not a "domestic end product" as defined in the clause at 252.225-7001, Buy American Act and Balance of Payments Program, treat the offer as a nonqualifying country offer. (See Example 4 of Table 25-1, Evaluation.)
225.107[0] Acquisition from or through other Government agencies.
Contracting activities must apply the evaluation procedures in [Subpart] 225.105 when using Federal supply schedules.
225.108 Excepted articles, materials, and supplies. 7
(a)(i) DoD has determined that the articles, materials, and supplies listed in FAR 25.108(d)(1) and in paragraph (d)(1) of this section, when purchased as end items or components, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality. Regard these items or components as being of domestic origin when incorporated in-
(A) An end product or construction material manufactured in the United States; or
(B) A qualifying country end product or construction material. (For construction material, see FAR 25.2.)
(ii) Scrap is domestic in origin if generated in, collected in, and prepared for processing in the United States.
(d)(1) Aluminum clad steel wire.
Sperm oil.
225.109 Solicitation provisions and contract clauses. 8
(a) Use the provision at 252.225-7000, Buy American Act--Balance of Payments Program Certificate, instead of the provisions at FAR 52.225-1, Buy American Certificate, and FAR 52.225-6, Balance of Payments Program Certificate. Use the provision in any solicitation that includes the clause at 252.225-7001, Buy American Act and Balance of Payments Program.
[225.171 Solicitations.]
(b[a]) For oral solicitations[,] inform prospective vendors that only domestic and qualifying country end products are acceptable, except nonqualifying country end products are acceptable if-
(i[1]) The items are excepted either on a blanket or an individual basis; or
(ii[2]) The price of the nonqualifying country end product is the low offer under the evaluation procedures in [Subpart] 225.105.
(d) Use the clause at 252.225-7001, Buy American Act and Balance of Payments Program, instead of the clauses at FAR 52.225-3, Buy American Act--Supplies, and FAR 52.225-7, Balance of Payments Program, in solicitations and contracts for supplies or services that require the furnishing of supplies.
(i) Do not use the clause if an exception to the Buy American Act or Balance of Payments Program is known to apply or if using the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program.
(ii) The clause need not be used if nonqualifying country end products are ineligible for award, including-
(A) End products restricted to domestic or domestic and qualifying country sources under Appropriations and Authorization Act restrictions (see 225.70);
(B) End products restricted to domestic or domestic and Canadian sources (see 225.71); and
(C) End products restricted under the authority of FAR 6.302-3.
(iii) The clause may be used if the contracting officer anticipates a waiver of the restrictions in paragraphs (d)(ii)(A) or (B) of this section.
225.109-70 Additional provisions and clauses.
(a) Use the clause at 252.225-7002, Qualifying Country Sources as Subcontractors, in solicitations and contracts that include one of the following clauses:
(1) 252.225-7001, Buy American Act and Balance of Payments Program.
(2) 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program.
(3) 252.225-7021, Trade Agreements.
(4) 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program.
(b) When only domestic end products are acceptable, the solicitation must make a statement to that effect.
SUBPART 225.2--BUY AMERICAN ACT--CONSTRUCTION MATERIALS
225.202 Policy[Exceptions].
(a)(3[2]) A nonavailability determination is not required for construction materials listed in FAR 25.10[4(a)]8(d)(1) or in 225.10[4(a)(iii)]8(d)(1). For other materials, a nonavailability determination must be approved at the levels specified in 225.102[3](b)(ii). Use the estimated value of the construction materials to determine the approval level.
225.206 Noncompliance.
(c)(4) Prepare any report of noncompliance in accordance with the procedures at 209.406-3 or 209.407-3.
SUBPART 225.3--BALANCE OF PAYMENTS PROGRAM
225.302 Policy.
(a[1]) DoD implements the Balance of Payments Program using evaluation factors similar to those which implement the Buy American Act. The Balance of Payments Program restrictions-
(i) Apply to acquisitions for foreign military sales;
(ii) Do not apply to services, except services which primarily involve the acquisition of supplies;
(iii) Do not apply to qualifying country end products;
(iv) Do not apply to articles, materials, or supplies produced or manufactured in Panama when purchased by and for the use of U.S. forces in Panama; and
(v) For acquisitions subject to the Trade Agreements Act, do not apply to information technology products in Federal Supply Group 70 or 74 that are substantially transformed in the United States.
(b[2])(i) Before solicitation, the determinations required by FAR 25.302[3](b)(2) and (3), or a determination that the cost of acquiring domestic end products or services is unreasonable (FAR 25.303(b)), may be made by the following individuals or their immediate deputies-[:]
ARMY |
Deputy Chief of Staff for Research, Development and Acquisition, Headquarters, U.S. Army Material Command Commander in Chief, U.S. Army, Europe and DCSLOG, U.S. Army, Europe Commander, Eighth U.S. Army and Chief of Staff, Eighth U.S. Army Commander, Corps of Engineers Command Commander, U.S. Army, Japan Commander, U.S. Army Medical Research and Development Command Commander, U.S. Army Forces Command Commander, U.S. Army, South |
NAVY |
Commander-in-Chief, U.S. Naval Forces, Europe Commander, U.S. Naval Forces, Japan Commander, U.S. Naval Forces, Philippines Commander-in-Chief, U.S. Atlantic Fleet Commander-in-Chief, U.S. Pacific Fleet Commander, Military Sealift Command Commandant, U.S. Marine Corps Commander, Naval Facilities Engineering Command Commanding General, III Marine Amphibious Force |
AIR FORCE |
Commander, U.S. Air Forces in Europe Commander, Pacific Air Forces Commander, Air Mobility Command Commander, Air Force Materiel Command Commander, Air Combat Command Commander, Air Force Space Command |
ADVANCED RESEARCH PROJECTS AGENCY Director, Contracts Management Office |
DEFENSE INFORMATION SYSTEMS AGENCY Director |
DEFENSE LOGISTICS AGENCY Executive Director, Procurement |
NATIONAL IMAGERY AND MAPPING AGENCY Deputy Director for Acquisition, Installations, and Logistics |
DEPARTMENT OF DEFENSE EDUCATION ACTIVITY Director |
(ii) The authority to make the determinations referred to in 225.302(b)(i) [paragraph (2)(i) of this section] may be redelegated below the levels [specified] in [that] paragraph (b)(i) for acquisitions estimated at $500,000 or less in foreign cost.
(3)(A[i]) This authority is not intended for use in making repetitive supply acquisitions or acquisitions of total annual supply requirements of items available in the United States but not available within the time required.
(B[ii]) DoD has determined that requirements for the items on the lists at FAR 25.10[4(a)]8(d)(1) and at 225.10[4(a)(iii)]8(d)(1) can only be filled by a foreign end product.
(4) DoD has determined the following items can only be acquired or performed in the country concerned-[:]
(A[i]) Maintenance and repair of, and acquisition of spare parts for, foreign-manufactured vehicles, equipment, machinery, and systems; provided, in the case of spare parts, the acquisition is restricted to the original manufacturer or its supplier in accordance with DoD standardization policy (see DoD Directive 4120.3, Defense Standardization and Specification Program);[.]
(B[ii]) Industrial gases;[.]
(C[iii]) Brand drugs specified by the Defense Medical Materiel Board;[.]
(D[iv]) Bulk construction materials: sand, gravel, and other soil materials, stone, concrete masonry units, and fired brick; and[.]
(E[v]) Overhaul and repair of vessels, aircraft, and vehicles which-
(1) [(A)] Are home-ported/stationed/deployed overseas; and
(2) [(B)] Cannot practically return to the United States or to U.S. operated repair facilities.
(F[vi]) Ready-mixed asphalt and portland cement concrete, provided that foreign cost is estimated at not more than $100,000.
(c[5])(i) Purchase of materials, equipment, and supplies for construction overseas shall generally be the responsibility of the contractor performing the work; but where necessary to comply with foreign law, to avoid taxation, or to obtain other advantages, consider direct purchase. Consider savings that may be obtained by exemptions from import and other taxes and, to the extent economical, take advantage of tax exemptions available under existing agreements.
(ii) When purchase of materials is the responsibility of the construction contractor, the evaluation differential is determined through the estimating process and applied before solicitation.
225.303[4] Procedures.
(a) Solicitation of offers. When soliciting orally, advise vendors that only domestic and qualifying country end products are acceptable unless an exception applies or the price of a domestic end product is unreasonable.
(b) Evaluation [of offers].
(i) Use the evaluation procedures in [Subpart] 225.105 instead of the evaluation procedures in FAR [Subpart] 25.303(b)[5]. Treatment of duty may differ when delivery is overseas.
(A) Duty may not be applicable to nonqualifying country offers.
(B) The U.S. Government cannot guarantee the exemption of duty for components or end products imported into foreign countries.
(C) Foreign governments may impose duties, and offers including such duties must be evaluated as offered.
(ii) Where the evaluation procedures in [Subpart] 225.105 result in the award of a nonqualifying country end product, the acquisition of domestic end products is unreasonable or inconsistent with public interest. If no domestic end product offers are received, the determination in FAR 25.302[3](b)(3[1]) is not required.
225.305 Solicitation provision and contract clause. 9
225.305-70 Additional clause.
In order to allow accurate reporting, by cognizant accounting and disbursing officers, of foreign and domestic expenditures, use the clause at 252.225-7005, Identification of Expenditures in the United States, in all negotiated contracts over $25,000 where-
(a) For supply contracts, the contract requires end products manufactured or produced in the United States; and
(1) The contractor is a foreign concern; or
(2) The contractor is a domestic concern and the Government will take title outside the United States.
(b) For contracts for construction, repair, and maintenance of real property, or services to be performed outside the United States-
(1) The contractor is a domestic concern; or
(2) The contractor is a foreign concern and the contract requires acquisition of materials, equipment, or services from U.S. sources.
SUBPART 225.4--TRADE AGREEMENTS
225.401 Definitions. 10
"Caribbean Basin country end product" includes petroleum or any product derived from petroleum.
"Eligible product" means, instead of the definition at FAR 25.401, a designated, NAFTA, or Caribbean Basin country end product in the categories listed in 225.403-70.
[225.401 Exceptions. 11
(b)(i) If a department or agency considers an individual acquisition of a product to be indispensable for national security or national defense purposes and appropriate for exclusion from the provisions of FAR Subpart 25.4, it may submit a request with supporting rationale to the Director of Defense Procurement (USD(AT&L)DP).
(ii) The following national security/national defense exceptions do not require approval by USD(AT&L)DP:
(A) Where purchase from foreign sources is restricted by the DoD annual appropriations or authorization acts (see Subpart 225.70) or by the establishment of required sources of supplies and services under FAR Part 8.
(B) Where competition from foreign sources is restricted under the authority of FAR 6.302-3(a)(2)(i). Provide USD(AT&L)DP a copy of the justification for restricting competition (see FAR 6.303-1(d)).
(C) Where competition from foreign sources is restricted under Subpart 225.71.
225.401-70 Products subject to trade agreement acts.
Foreign end products subject to the Trade Agreements Act and NAFTA are those in the following Federal supply groups (FSG). If a product is not in one of the listed groups, the Trade Agreements Act and NAFTA do not apply. The definition of Caribbean Basin country end products in FAR 25.003 excludes those end products that are not eligible for duty-free treatment under 19 U.S.C. 2703(b). However, 225.003 expands the definition of Caribbean Basin country end products to include petroleum and any product derived from petroleum. The list of products has been annotated to indicate those products that are eligible for designated and NAFTA countries, but are not presently eligible for Caribbean Basin countries.
225.402 Policy[General].
(a[1]) To estimate the value of the acquisition, use the total estimated value of end products subject to trade agreement acts (see 225.403[1]-70).
(1[2]) See [Subpart] 225.105 for evaluation of eligible products and U.S. made end products, except when acquiring information technology end products in Federal Supply Group 70 or 74 that are subject to the Trade Agreements Act.
[225.403 Trade Agreements Act.]
(c)(i) Except as provided in paragraphs (c)(ii) and (iii) of this section, do not purchase nondesignated country end products subject to the Trade Agreements Act unless they are NAFTA, Caribbean Basin, or qualifying country end products (see 225.872-1).
(ii) The prohibition in paragraph (c)(i) of this section does not apply when the contracting officer determines that offers of U.S. made, qualifying country, or eligible products from responsive, responsible offerors are either-
(A) Not received; or
(B) Insufficient to fill the Government's requirements. In these cases, accept all responsive, responsible offers of U.S. made, qualifying country, and eligible products before accepting any other offers.
(iii) National interest waivers under section 302(b)(2) of the Trade Agreements Act are approved on a case-by-case basis. Except as delegated in paragraphs (c)(iii)(A) and (B) of this section, a request for a national interest waiver shall include supporting rationale and be submitted under department/agency procedures to the Director of Defense Procurement.
(A) The head of the contracting activity may approve a national interest waiver for a purchase by an overseas purchasing activity of products critical to the support of U.S. forces stationed abroad. The waiver must be supported by a written statement from the requiring activity stating that the requirement is critical for the support of U.S. forces stationed abroad.
(B) The Commander, Defense Energy Support Center, may approve national interest waivers for purchases of fuel for use by U.S. forces overseas.
225.403 Exceptions. 12
(c)(1)(A) If a department or agency considers an individual acquisition of a product to be indispensable for national security or national defense purposes and appropriate for exclusion from the provisions of FAR Subpart 25.4, it may submit a request with supporting rationale to the Director of Defense Procurement (USD(A&T)DP).
(B) The following national security/national defense exceptions do not require approval by USD(A&T)DP-
(1) Where purchase from foreign sources is restricted by the DoD annual Appropriations or Authorization Acts (see Subpart 225.70) or by the establishment of required sources of supplies and services under FAR Part 8.
(2) Where competition from foreign sources is restricted under the authority of FAR 6.302-3(a)(2)(i). Provide USD(A&T)DP a copy of the justification for restricting competition in accordance with FAR 25.402(e) and FAR 6.303-1(d).
(3) Where competition from foreign sources is restricted under Subpart 225.71.
(g)(4) In accordance with Section 8094 of the Fiscal Year 1994 Defense Appropriations Act (Pub. L. 103-139), the exception for petroleum and any product derived from petroleum does not apply.
225.403-70 Products subject to trade agreement acts.
Foreign end products subject to the Trade Agreements Act and NAFTA are those in the following Federal supply groups (FSG). If a product is not in one of the listed groups, the Trade Agreements Act and NAFTA do not apply. The definition of Caribbean Basin country end products in FAR 25.401 excludes those end products which are not eligible for duty-free treatment under 19 U.S.C. 2703(b). However, 225.401 expands the definition of Caribbean Basin country end products to include petroleum and any product derived from petroleum. The list of products has been annotated to indicate those products which are eligible for designated and NAFTA countries, but are not presently eligible for Caribbean Basin countries.
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225.405[8] Procedures.
(d[a)(4]) The requirements of FAR 25.405[8](d[a])[(4)] do not apply to offshore acquisitions or to Defense Energy Support Center post, camp, or station overseas requirements.
225.408 Solicitation provisions and contract clauses. 13
(a)(i) Use the provision at 252.225-7006, Buy American Act--Trade Agreements--Balance of Payments Program Certificate, instead of the provision at FAR 52.225-8, Buy American Act--Trade Agreements--Balance of Payments Program Certificate, in all solicitations that include the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program.
(ii) Except as provided in paragraph (a)(4) of this section, use the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program, instead of the clause at FAR 52.225-9, Buy American Act--Trade Agreements--Balance of Payments Program. The clause need not be used where purchase from foreign sources is restricted (see 225.403(c)(1)(B)). The clause may be used where the contracting officer anticipates a waiver of the restriction.
(iii) Use the provision at 252.225-7020, Trade Agreements Certificate, in all solicitations that include the clause at 252.225-7021, Trade Agreements.
(iv) Use the clause at 252.225-7021, Trade Agreements, instead of the clause at FAR 52.225-9, Buy American Act--Trade Agreements--Balance of Payments Program, when acquiring information technology products in Federal Supply Group 70 or 74.
(v)(A) Use the provision at 252.225-7035, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program Certificate, instead of the provision at FAR 52.225-20, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program Certificate, in all solicitations that include the clause at 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program.
(B)(1) Use the basic provision when the basic clause at 252.225-7036 is used.
(2) Use the provision with its Alternate I when the clause at 252.225-7036 is used with its Alternate I.
(vi)(A) Use the clause at 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program, instead of the clause at FAR 52.225-21, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program. The clause need not be used where purchase from foreign sources is restricted (see 225.403(c)(1)(B)). The clause may be used where the contracting officer anticipates a waiver of the restriction.
(B)(1) Use the clause in all solicitations and contracts for the items listed at 225.403-70, when the estimated value is $53,150 or more and the Trade Agreements Act does not apply. Include the clause in solicitations for multiple line items if any line item is subject to NAFTA.
(2) Use the clause with its Alternate I when the estimated value is between $25,000 and $53,150.
(C) Application of the procedures in 225.402(a) and the acquisition of noneligible and eligible products under the same solicitation may result in the application of the North American Free Trade Agreement Implementation Act to only some of the items solicited. In such case, indicate in the schedule those items covered by the Act.
[SUBPART 225.5-EVALUATING FOREIGN OFFERS-SUPPLY CONTRACTS14
225.502 Application.
Use the following procedures instead of those in FAR 25.502. These procedures do not apply to acquisitions of information technology end products in Federal Supply Group 70 or 74 that are subject to the Trade Agreements Act.
(1) Treat offers of eligible end products under acquisitions subject to the Trade Agreements Act or NAFTA as if they were qualifying country offers. As used in this section, the term "nonqualifying country offer" may also apply to an offer that is not an eligible offer under a trade agreement (see 225.504(4)).
(2) Except as provided in paragraph (3) of this section, evaluate offers by adding a 50 percent factor to the price (including duty) of each nonqualifying country offer (see 225.504(1)).
(i) Nonqualifying country offers include duty in the offered price. When applying the factor, evaluate based on the inclusion of duty, whether or not duty is to be exempted. If award is made on the nonqualifying country offer and duty is to be exempted through inclusion of the clause at FAR 52.225-8, Duty-Free Entry, award at the offered price minus the amount of duty identified in the provision at 252.225-7003, Information for Duty-Free Entry Evaluation (see 225.504(1)(ii)).
(ii) When a nonqualifying country offer includes more than one line item, apply the 50 percent factor-
(3) When application of the factor would not result in the award of a domestic end product, i.e., when no domestic offers are received (see 225.504(3)) or when a qualifying country offer is lower than the domestic offer (see 225.504(2)), evaluate nonqualifying country offers without the 50 percent factor.
(i) If duty is to be exempted through inclusion of the clause at FAR 52.225-8, Duty-Free Entry, evaluate the nonqualifying country offer exclusive of duty by reducing the offered price by the amount of duty identified in the clause at 252.225-7003, Information for Duty-Free Entry Evaluation (see 225.504(2)(ii) and (3)(ii)). If award is made on the nonqualifying country offer, award at the offered price minus duty.
(ii) If duty is not to be exempted, evaluate the nonqualifying country offer inclusive of duty (see 225.504(2)(i) and (3)(i)).
(4) If these evaluation procedures result in a tie between a nonqualifying country offer and a domestic offer, make award on the domestic offer.
(5)(i) There are two tests that must be met to determine whether a manufactured item is a domestic end product-
(ii) Because of the component test, the definition of "domestic end product" is more restrictive than the definition for-
(iii) If an offer is for a "U.S. made end product," "domestically produced end product," or the product of a small business, but is not a "domestic end product" as defined in the clause at 252.225-7001, Buy American Act and Balance of Payments Program, treat the offer as a nonqualifying country offer (see 225.504(4)).
225.504 Evaluation examples.
SUBPART 225.6--CUSTOMS AND DUTIES 15
225.602 Policy.
(1) Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States authorizes duty-free importation of defense supplies.
(2) 19 U.S.C. 1309 authorizes duty-free importation of certain supplies (not including equipment) for vessels or aircraft operated by the United States (see FAR 25.604(b)).
(3) Unless the supplies are entitled to duty-free treatment under a special category in the Harmonized Tariff Schedule of the United States (e.g., the Caribbean Basin Economic Recovery Act or NAFTA), or unless the supplies already have entered into the customs territory of the United States and duty already has been paid, DoD will issue duty-free entry certificates for-
(i) Qualifying country supplies (end products and components) on all defense contracts;
(ii) Eligible products (end products but not components) on defense contracts subject to the Trade Agreements Act or NAFTA; and
(iii) Other foreign supplies, if there is reasonable assurance that the administrative and other costs of processing and controlling the certificates will not exceed the amount of duty that would be paid.
225.603 Procedures.
(a) General.
(i) Preaward.
(A) Unless duty was paid prior to submission of the offer, an offer of domestic end products with no nonqualifying country components, an offer of qualifying country end products, or an offer of eligible products under the Trade Agreements Act or NAFTA, should not include duty.
(B) Offers of U.S. made end products with nonqualifying country components, and offers that are neither qualifying country offers nor offers of eligible products under a trade agreement, should contain applicable duty.
(C) Exclude from the evaluation of domestic end products, or information technology end products in Federal Supply Group 70 or 74 in acquisitions subject to the Trade Agreements Act, any duty for nonqualifying country components listed in the provision at 252.225-7003, Information for Duty-Free Entry Evaluation, for which duty-free entry will be granted.
(D) Except for acquisitions of information technology end products in Federal Supply Group 70 or 74 subject to the Trade Agreements Act, apply the evaluation procedures for the Buy American Act in accordance with 225.105.
(ii) Award. Exclude duty from the contract price for supplies (end products or components) that are to be accorded duty-free entry. If duty-free entry is granted to the successful offeror in accordance with the clause at FAR 52.225-10, Duty-Free Entry, and the clause at 252.225-7003, Information for Duty-Free Entry Evaluation, request that the offeror provide the list of foreign supplies that are subject to such duty-free entry, and list such supplies in the contract clause at 252.225-7008, Supplies to be Accorded Duty-Free Entry.
(iii) Postaward.
(A) Issue duty-free entry certificates for all qualifying country supplies in accordance with the policy at 225.602(3)(i) and the clause at 252.225-7009, Duty-Free Entry--Qualifying Country Supplies (End Products and Components); for all eligible products subject to trade agreements in accordance with the policy at 225.602(3)(ii) and the clause at 252.225-7037, Duty-Free Entry--Eligible End Products; and for other foreign supplies in accordance with the policy at 225.602(3)(iii) on contracts containing the clause at FAR 52.225-10, Duty-Free Entry; or (following to the extent practicable the procedures required by the clause at FAR 52.225-10, Duty-Free Entry, and the clause at 252.225-7010, Duty-Free Entry--Additional Provisions) on other contracts-
(1) That fall within one of the following categories:
(i) Direct purchases of foreign supplies under a DoD prime contract, whether title passes at point of origin or at destination in the United States, provided the contract states that the final price is exclusive of duty.
(ii) Purchases of foreign supplies by a domestic prime contractor under a cost-reimbursement type contract or by a cost-reimbursement type subcontractor (where no fixed-price prime or fixed-price subcontract intervenes between the purchaser and the Government), whether title passes at point of origin or at destination in the United States. If a fixed-price prime or fixed-price subcontract intervenes, follow the criteria stated in paragraph (a)(iii)(A)(1)(iii) of this section.
(iii) Purchases of foreign supplies by a fixed-price domestic prime contractor, a fixed-price subcontractor, or a cost-type subcontractor where a fixed-price prime contract or fixed-price subcontract intervenes, provided the fixed-price prime contract and, where applicable, fixed-price subcontract prices are, or are amended to be, exclusive of duty.
(2) For which the supplies so purchased will be delivered to the Government or incorporated in Government-owned property or in an end product to be furnished to the Government, and for which duty will be paid if such supplies or any portion are used for other than the performance of the Government contract or disposed of other than for the benefit of the Government in accordance with the contract terms; and
(3) For which such acquisition abroad is authorized by the terms of the contract or subcontract or by the contracting officer.
(B) Under a fixed-price contract, negotiate an equitable reduction in the contract price if duty-free entry is granted for any nonqualifying country component not listed in the Schedule as duty-free, even if contract award was based on furnishing a domestic component or a qualifying country component.
(b) Formal entry and release.
(i) The administrative contracting officer must-
(A) Ensure that prime contractors are aware of and understand any Duty-Free Entry clause requirements. Contractors should understand that failure by them or their subcontractors to include the data required by the clause will result in treatment of the shipment as without benefit of free entry under Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States.
(B) Upon receipt of the required notice of purchase of foreign supplies from the contractor or any tier subcontractor-
(1) Verify the duty-free entitlement of goods entering under the contract; and
(2) Review the prime contract to ensure that performance of the contract requires the foreign supplies (quantity and price) identified in the notice.
(C) Upon receipt of notification from the contractor that it is placing a foreign purchase that was not identified at the time of contract award-
(1) Determine whether a reduction in the contract price is required under the clause at FAR 52.225-10, Duty-Free Entry;
(2) If so, make an equitable adjustment in the contract price, unless the procuring contracting officer waives this adjustment;
(3) Determine the price of the foreign supplies exclusive of duty, and advise the contractor that that amount will be the maximum dollar value of supplies for which duty-free entry certificates will be issued.
(D) Within 20 days after receiving the notification of purchase of foreign supplies, forward the following information in the format indicated to the Commander, DCMC New York, ATTN: Customs Team, DCMDN-GNIC, 207 New York Avenue, Staten Island, NY 10305-5013-
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(E) If a contract modification results in a change to any data verifying duty-free entitlement previously furnished, forward a revised notification including the changed data to DCMC New York.
(ii) The responsibility for issuing duty-free entry certificates for foreign supplies purchased under a DoD contract or subcontract rests with the Customs Team, DCMDN-GNIC, DCMC New York. Upon receipt of import documentation for incoming shipments from the contractor, its agent, or the U.S. Customs Service, DCMC New York will verify the duty-free entitlement and execute the duty-free entry certificate.
(iii) Upon arrival of foreign supplies at ports of entry, the consignee, generally the contractor or its agent (import broker) for shipments to other than a military installation, will file U.S. Customs Forms 7501, 7501A, or 7506, with the District Director of Customs.
(c) Immediate entry and release. Importations made in the name of a DoD military facility or being shipped directly to a military facility are entitled to release under the immediate delivery procedure.
(i) A DoD immediate delivery application has been approved and is on file at Customs Headquarters.
(ii) The application is for an indefinite period and is good for all Customs districts, areas, and ports.
225.604 Exempted supplies.
(b)(i) The term "supplies"-
(A) Includes articles known as "stores," such as food, medicines, and toiletries, as well as all consumable articles necessary and appropriate for the propulsion, operation, and maintenance of the vessel or aircraft, such as fuel, oil, gasoline, grease, paint, cleansing compounds, solvents, wiping rags, and polishes.
(B) Does not include portable articles necessary and appropriate for the navigation, operation, or maintenance of vessel or aircraft and for the comfort and safety of the persons on board, such as rope, bolts and nuts, bedding, china and cutlery, which are included in the term "equipment."
(ii) The duty-free certificate shall be printed, stamped, or typed on the face of Customs Form 7501, or attached, and shall be executed by a duly designated officer or civilian official of the appropriate department or agency in the following form-
225.605 Contract clause. 16
(b) The dollar amount in paragraphs (b)(1) and (i)(2) of the FAR 52.225-10 clause may be reduced appropriately in solicitations and contracts of $100,000 or less.
225.605-70 Additional solicitation provisions and contract clauses.
(a) Use the clause at 252.225-7009, Duty-Free Entry--Qualifying Country Supplies (End Products and Components), in solicitations and contracts for supplies and in solicitations and contracts for services involving the furnishing of supplies, except for solicitations and contracts for supplies for exclusive use outside the United States.
(b) Use the clause at 252.225-7037, Duty-Free Entry--Eligible End Products, in solicitations and contracts for supplies and services when the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program, is used.
(c) Use the clause at 252.225-7010, Duty-Free Entry--Additional Provisions, in solicitations and contracts that include the clause at FAR 52.225-10, Duty-Free Entry.
(d) Use the provision at 252.225-7003, Information for Duty-Free Entry Evaluation, in solicitations that include the clause at FAR 52.225-10, Duty-Free Entry. Use the provision with its Alternate I when the clause at 252.225-7021, Trade Agreements, is used.
(e) Use the clause at 252.225-7008, Supplies to be Accorded Duty-Free Entry, in solicitations and contracts that provide for duty-free entry and that include the clause at FAR 52.225-10, Duty-Free Entry.
SUBPART 225.7--RESTRICTIONS ON CERTAIN FOREIGN PURCHASES[PROHIBITED SOURCES]
225.702[1] Restrictions.
See 209.104-1(g)(i) for restrictions on contracting with firms owned or controlled by foreign governments that support terrorism. See 209.104-1(g)(ii) for prohibition on award of a DoD contract under a national security program to an entity controlled by a foreign government when access to proscribed information is required to perform the contract.
* * * * *
SUBPART 225.8-[OTHER] INTERNATIONAL AGREEMENTS AND COORDINATION
225.801 International agreements[General].
* * * * *
[SUBPART 225.9--CUSTOMS AND DUTIES 17
225.901 Policy.
(1) Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States authorizes duty-free importation of defense supplies.
(2) 19 U.S.C. 1309 authorizes duty-free importation of certain supplies (not including equipment) for vessels or aircraft operated by the United States (see FAR 25.903(b)).
(3) Unless the supplies are entitled to duty-free treatment under a special category in the Harmonized Tariff Schedule of the United States (e.g., the Caribbean Basin Economic Recovery Act or NAFTA), or unless the supplies already have entered into the customs territory of the United States and duty already has been paid, DoD will issue duty-free entry certificates for-
(i) Qualifying country supplies (end products and components) on all defense contracts;
(ii) Eligible products (end products but not components) on defense contracts subject to the Trade Agreements Act or NAFTA; and
(iii) Other foreign supplies, if there is reasonable assurance that the administrative and other costs of processing and controlling the certificates will not exceed the amount of duty that would be paid.
225.902 Procedures.
(1) General.
(i) Preaward.
(A) Unless duty was paid prior to submission of the offer, an offer of domestic end products with no nonqualifying country components, an offer of qualifying country end products, or an offer of eligible products under the Trade Agreements Act or NAFTA, should not include duty.
(B) Offers of U.S. made end products with nonqualifying country components, and offers that are neither qualifying country offers nor offers of eligible products under a trade agreement, should contain applicable duty.
(C) Exclude from the evaluation of domestic end products, or information technology end products in Federal Supply Group 70 or 74 in acquisitions subject to the Trade Agreements Act, any duty for nonqualifying country components listed in the provision at 252.225-7003, Information for Duty-Free Entry Evaluation, for which duty-free entry will be granted.
(D) Except for acquisitions of information technology end products in Federal Supply Group 70 or 74 subject to the Trade Agreements Act, apply the evaluation procedures for the Buy American Act in accordance with 225.502.
(ii) Award. Exclude duty from the contract price for supplies (end products or components) that are to be accorded duty-free entry. If duty-free entry is granted to the successful offeror in accordance with the clause at FAR 52.225-8, Duty-Free Entry, and the clause at 252.225-7003, Information for Duty-Free Entry Evaluation, request that the offeror provide the list of foreign supplies that are subject to such duty-free entry, and list such supplies in the contract clause at 252.225-7008, Supplies to be Accorded Duty-Free Entry.
(iii) Postaward.
(A) Issue duty-free entry certificates for all qualifying country supplies in accordance with the policy at 225.901(3)(i) and the clause at 252.225-7009, Duty-Free Entry--Qualifying Country Supplies (End Products and Components); for all eligible products subject to trade agreements in accordance with the policy at 225.901(3)(ii) and the clause at 252.225-7037, Duty-Free Entry--Eligible End Products; and for other foreign supplies in accordance with the policy at 225.901(3)(iii) on contracts containing the clause at FAR 52.225-8, Duty-Free Entry; or (following to the extent practicable the procedures required by the clause at FAR 52.225-8, Duty-Free Entry, and the clause at 252.225-7010, Duty-Free Entry--Additional Provisions) on other contracts-
(1) That fall within one of the following categories:
(i) Direct purchases of foreign supplies under a DoD prime contract, whether title passes at point of origin or at destination in the United States, provided the contract states that the final price is exclusive of duty.
(ii) Purchases of foreign supplies by a domestic prime contractor under a cost-reimbursement type contract or by a cost-reimbursement type subcontractor (where no fixed-price prime or fixed-price subcontract intervenes between the purchaser and the Government), whether title passes at point of origin or at destination in the United States. If a fixed-price prime or fixed-price subcontract intervenes, follow the criteria stated in paragraph (a)(iii)(A)(1)(iii) of this section.
(iii) Purchases of foreign supplies by a fixed-price domestic prime contractor, a fixed-price subcontractor, or a cost-type subcontractor where a fixed-price prime contract or fixed-price subcontract intervenes, provided the fixed-price prime contract and, where applicable, fixed-price subcontract prices are, or are amended to be, exclusive of duty;
(2) For which the supplies so purchased will be delivered to the Government or incorporated in Government-owned property or in an end product to be furnished to the Government, and for which duty will be paid if such supplies or any portion are used for other than the performance of the Government contract or disposed of other than for the benefit of the Government in accordance with the contract terms; and
(3) For which such acquisition abroad is authorized by the terms of the contract or subcontract or by the contracting officer.
(B) Under a fixed-price contract, negotiate an equitable reduction in the contract price if duty-free entry is granted for any nonqualifying country component not listed in the Schedule as duty-free, even if contract award was based on furnishing a domestic component or a qualifying country component.
(2) Formal entry and release.
(i) The administrative contracting officer must-
(A) Ensure that prime contractors are aware of and understand any Duty-Free Entry clause requirements. Contractors should understand that failure by them or their subcontractors to include the data required by the clause will result in treatment of the shipment as without benefit of free entry under Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States.
(B) Upon receipt of the required notice of purchase of foreign supplies from the contractor or any tier subcontractor-
(C) Upon receipt of notification from the contractor that it is placing a foreign purchase that was not identified at the time of contract award-
(1) Determine whether a reduction in the contract price is required under the clause at FAR 52.225-8, Duty-Free Entry;
(2) If so, make an equitable adjustment in the contract price, unless the procuring contracting officer waives this adjustment;
(3) Determine the price of the foreign supplies exclusive of duty, and advise the contractor that that amount will be the maximum dollar value of supplies for which duty-free entry certificates will be issued.
(D) Within 20 days after receiving the notification of purchase of foreign supplies, forward the following information in the format indicated to the Commander, DCMC New York, ATTN: Customs Team, DCMDE-GNIC, 207 New York Avenue, Staten Island, NY 10305-5013:
(ii) The responsibility for issuing duty-free entry certificates for foreign supplies purchased under a DoD contract or subcontract rests with the Customs Team, DCMDE-GNIC, DCMC New York. Upon receipt of import documentation for incoming shipments from the contractor, its agent, or the U.S. Customs Service, DCMC New York will verify the duty-free entitlement and execute the duty-free entry certificate.
(iii) Upon arrival of foreign supplies at ports of entry, the consignee, generally the contractor or its agent (import broker) for shipments to other than a military installation, will file U.S. Customs Form 7501, 7501A, or 7506, with the District Director of Customs.
(3) Immediate entry and release. Importations made in the name of a DoD military facility or being shipped directly to a military facility are entitled to release under the immediate delivery procedure.
225.903 Exempted supplies.
(b)(i) The term "supplies"-
(A) Includes articles known as "stores," such as food, medicines, and toiletries, as well as all consumable articles necessary and appropriate for the propulsion, operation, and maintenance of the vessel or aircraft, such as fuel, oil, gasoline, grease, paint, cleansing compounds, solvents, wiping rags, and polishes.
(B) Does not include portable articles necessary and appropriate for the navigation, operation, or maintenance of vessel or aircraft and for the comfort and safety of the persons on board, such as rope, bolts and nuts, bedding, china and cutlery, which are included in the term "equipment."
(ii) The duty-free certificate shall be printed, stamped, or typed on the face of Customs Form 7501, or attached, and shall be executed by a duly designated officer or civilian official of the appropriate department or agency in the following form:
SUBPART 225.9-[10]-ADDITIONAL FOREIGN ACQUISITION CLAUSES [REGULATIONS]
225.9[10]70 Clause deviations in overseas contracts.
See 201.403(2) for approval authority for clause deviations in overseas contracts with governments of North Atlantic Treaty Organization (NATO) countries or other allies or with United Nations or NATO organizations.
225.971 Correspondence in English. 18
Use the clause at 252.225-7041, Correspondence in English, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.
225.972 Authorization to perform.
Use the clause at 252.225-7042, Authorization to Perform, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.
* * * * *
[SUBPART 225.11-SOLICITATION PROVISIONS AND CONTRACT CLAUSES 19
225.1101 Acquisition of supplies.
(1) Use the provision at 252.225-7000, Buy American Act--Balance of Payments Program Certificate, instead of the provision at FAR 52.225-2, Buy American Act-Balance of Payments Program Certificate. Use the provision in any solicitation that includes the clause at 252.225-7001, Buy American Act and Balance of Payments Program.
(2) Use the clause at 252.225-7001, Buy American Act and Balance of Payments Program, instead of the clause at FAR 52.225-1, Buy American Act-Balance of Payments Program-Supplies, in solicitations and contracts for supplies or services that require the furnishing of supplies.
(i) Do not use the clause if an exception to the Buy American Act or Balance of Payments Program is known to apply or if using the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program.
(ii) The clause need not be used if nonqualifying country end products are ineligible for award, including-
(A) End products restricted to domestic or domestic and qualifying country sources under appropriations and authorization act restrictions (see Subpart 225.70);
(B) End products restricted to domestic or domestic and Canadian sources (see Subpart 225.71); and
(C) End products restricted under the authority of FAR 6.302-3.
(iii) The clause may be used if the contracting officer anticipates a waiver of the restriction in paragraph (2)(ii)(A) or (B) of this section.
(3) Use the clause at 252.225-7002, Qualifying Country Sources as Subcontractors, in solicitations and contracts that include one of the following clauses:
(i) 252.225-7001, Buy American Act and Balance of Payments Program.
(ii) 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program.
(iii) 252.225-7021, Trade Agreements.
(iv) 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program.
(4) Use the provision at 252.225-7003, Information for Duty-Free Entry Evaluation, in solicitations that include the clause at FAR 52.225-8, Duty-Free Entry. Use the provision with its Alternate I when the clause at 252.225-7021, Trade Agreements, is used.
(5) Use the provision at 252.225-7006, Buy American Act--Trade Agreements--Balance of Payments Program Certificate, instead of the provision at FAR 52.225-6, Trade Agreements Certificate, in all solicitations that include the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program.
(6) Except as provided in paragraph (11) of this section, use the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program, instead of the clause at FAR 52.225-5, Trade Agreements. The clause need not be used where purchase from foreign sources is restricted (see 225.401(b)(ii)). The clause may be used where the contracting officer anticipates a waiver of the restriction.
(7) Use the clause at 252.225-7008, Supplies to be Accorded Duty-Free Entry, in solicitations and contracts that provide for duty-free entry and that include the clause at FAR 52.225-8,
Duty-Free Entry.
(8) Use the clause at 252.225-7009, Duty-Free Entry--Qualifying Country Supplies (End Products and Components), in solicitations and contracts for supplies and in solicitations and contracts for services involving the furnishing of supplies, except for solicitations and contracts for supplies for exclusive use outside the United States.
(9) Use the clause at 252.225-7010, Duty-Free Entry--Additional Provisions, in solicitations and contracts that include the clause at FAR 52.225-8, Duty-Free Entry.
(10) Use the provision at 252.225-7020, Trade Agreements Certificate, in all solicitations that include the clause at 252.225-7021, Trade Agreements.
(11) Use the clause at 252.225-7021, Trade Agreements, instead of the clause at FAR 52.225-5, Trade Agreements, when acquiring information technology products in Federal Supply Group 70 or 74.
(12) Use the provision at 252.225-7035, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program Certificate, instead of the provision at FAR 52.225-4, Buy American Act--North American Free Trade Agreement-Israeli Trade Act-Balance of Payments Program Certificate, in all solicitations that include the clause at 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program.
(13) Use the clause at 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program, instead of the clause at FAR 52.225-3, Buy American Act--North American Free Trade Agreement-Israeli Trade Act-Balance of Payments Program. The clause need not be used where purchase from foreign sources is restricted (see 225.401(b)(ii)). The clause may be used where the contracting officer anticipates a waiver of the restriction.
(B) Use the clause with its Alternate I when the estimated value is between $25,000 and $53,150.
(ii) Application of the procedures in 225.402 and the acquisition of noneligible and eligible products under the same solicitation may result in the application of the North American Free Trade Agreement Implementation Act to only some of the items solicited. In such case, indicate in the Schedule those items covered by the Act.
(14) Use the clause at 252.225-7037, Duty-Free Entry--Eligible End Products, in solicitations
and contracts for supplies and services when the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036, Buy American Act--North American Free Trade Agreement Implementation Act-Balance of Payments Program, is used.
225.1103 Other provisions and clauses.
(1) In order to allow accurate reporting, by cognizant accounting and disbursing officers, of foreign and domestic expenditures, use the clause at 252.225-7005, Identification of Expenditures in the United States, in all negotiated contracts over $25,000 where-
(2) Use the clause at 252.225-7041, Correspondence in English, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.
(3) Use the clause at 252.225-7042, Authorization to Perform, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.]
* * * * *
PART 242-CONTRACT ADMINISTRATION AND AUDIT SERVICES
* * * * *
242.302 Contract administration functions.
(a) * * *
(19) Also negotiate and issue contract modifications reducing contract prices in connection with the provisions of paragraph (b)[(c)] of the clause at FAR 52.225-10[8], Duty-Free Entry.
* * * * *
PART 252-SOLICITATION PROVISIONS AND CONTRACT CLAUSES
* * * * *
252.225-7000 Buy American Act--Balance of Payments Program Certificate.
As prescribed in 225.109(a)[1101(1)], use the following provision:
* * * * *
252.225-7001 Buy American Act and Balance of Payments Program.
As prescribed in 225.109(d)[1101(2)], use the following clause:
* * * * *
252.225-7002 Qualifying Country Sources as Subcontractors.
As prescribed in 225.109-70(a)[1101(3)], use the following clause:
* * * * *
252.225-7003 Information for Duty-Free Entry Evaluation.
As prescribed in 225.605-70(d)[1101(4)], use the following provision:
* * * * *
ALTERNATE I (MAR 1998).
As prescribed in 225.605-70(d)[1101(4)], substitute the following paragraph (a) for paragraph (a) of the basic clause:
* * * * *
252.225-7005 Identification of Expenditures in the United States.
As prescribed in 225.305-70[1103(1)], use the following clause:
* * * * *
252.225-7006 Buy American Act--Trade Agreements--Balance of Payments Program Certificate.
As prescribed in 225.408(a)(i)[1101(5)], use the following provision:
* * * * *
252.225-7007 Buy American Act--Trade Agreements--Balance of Payments Program.
As prescribed in 225.408(a)(ii)[1101(6)], use the following clause:
* * * * *
252.225-7008 Supplies to be Accorded Duty-Free Entry.
As prescribed in 225.605-70(e)[1101(7)], use the following clause:
* * * * *
252.225-7009 Duty-Free Entry--Qualifying Country Supplies (End Products and Components).
As prescribed in 225.605-70(a)[1101(8)], use the following clause:
* * * * *
252.225-7010, Duty-Free Entry-Additional Provisions.
As prescribed in 225.605-70(c)[1101(9)], use the following clause:
* * * * *
252.225-7020 Trade Agreements Certificate.
As prescribed in 225.408(a)(iii)[1101(10)], use the following provision:
* * * * *
252.225-7021 Trade Agreements.
As prescribed in 225.408(a)(iv)[1101(11)], use the following clause:
* * * * *
252.225-7035 Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program Certificate.
As prescribed in 225.408(a)(v)[1101(12)], use the following provision:
* * * * *
ALTERNATE I (MAR 1998)
As prescribed in 225.408(a)(v)(B)(2)[1101(12)(ii)], substitute the phrase "Canadian end product" for the phrase "NAFTA country end product" in paragraph (a); and substitute the phrase "Canadian end products" for the phrase "NAFTA country end products" in paragraphs (b) and (c)(2)(ii) of the basic clause.
252.225-7036 Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program.
As prescribed in 225.408(a)(vi)[1101(13)], use the following clause:
* * * * *
ALTERNATE I (SEP 1999)
As prescribed in 225.408(a)(vi)(B)(2)[1101(13)(i)(B)], substitute the following paragraphs (a)(6), (c), and (d) for paragraphs (a)(6), (c), and (d) of the basic clause:
* * * * *
252.225-7037 Duty-Free Entry--Eligible End Products.
As prescribed in 225.605-70(b)[1101(14)], use the following clause:
* * * * *
252.225-7041 Correspondence in English.
As prescribed in 225.971[1103(2)], use the following clause:
* * * * *
252.225-7042 Authorization to Perform.
As prescribed in 225.972[1103(3)], use the following clause:
* * * *
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF DEFENSE
48 CFR Part 226
[DFARS Case 99-D300]
Defense Federal Acquisition Regulation Supplement; Utilization of Indian Organizations and Indian-Owned Economic Enterprises
AGENCY: Department of Defense (DoD).
ACTION: Final rule
SUMMARY: The Acting Director of Defense Procurement has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to revise procedures pertaining to the Indian Incentive Program. The Program provides for incentive payments to Government
contractors that use Indian organizations and Indian-owned economic enterprises as subcontractors. This rule reflects new statutory provisions that permit small business concerns to participate in the
Indian Incentive Program.
EFFECTIVE DATE: April 13, 2000.
FOR FURTHER INFORMATION CONTACT: Ms. Susan Schneider, Defense Acquisition Regulations Council, PDUSD (AT&L) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0262; telefax (703) 602-0350. Please cite DFARS Case 99-D300.
SUPPLEMENTARY INFORMATION:
A. Background
The rule revises DFARS Subpart 226.1 to update procedures pertaining to the Indian Incentive Program. Section 504 of the Indian Financing Act of 1974 (25 U.S.C. 1544) established the Indian Incentive Program, which provides for payment of incentives to Government contractors that use Indian organizations and Indian-owned economic enterprises as subcontractors. Prior to fiscal year 1999, annual appropriations acts restricted DoD payments under the Program to those contractors that submitted small business subcontracting plans pursuant to 15 U.S.C. 637(d) or Section 854 of Public Law 101-89 (15 U.S.C. 637 note). Since small business concerns are not required to submit
subcontracting plans, small businesses were excluded from participation in the Indian Incentive Program under DoD contracts. Section 8024 of the DoD Appropriations Act for Fiscal Year 1999 (Public Law 105-262) and Section 8024 of the DoD Appropriations Act for Fiscal Year 2000
(Public Law 106-79) eliminated the requirements for a DoD contractor to submit a subcontracting plan before it may participate in the Indian Incentive Program.
DoD implements the Indian Incentive Program through use of the clause at Federal Acquisition Regulation (FAR) 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises. The FAR and DFARS previously prescribed use of the clause in only those DoD
contracts that contain subcontracting plan requirements. On October 26, 1999, a proposed FAR rule was published at 64 FR 57964 to remove the FAR requirements for DoD use of the clause; these DFARS amendments replace the FAR requirements.
DoD published a proposed rule at 64 FR 63003 on November 18, 1999. Thirty-six sources submitted comments on the proposed rule. DoD considered all comments in the development of the final rule. The final rule differs from the proposed rule in that it lowers the dollar threshold for us of the clause at FAR 52.226-1, to provide increased opportunity or small business concerns to participate in the Indian Incentive Program.
This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD expects this final 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. A final regulatory
flexibility analysis has been prepared and its summarized as follows: The legal basis for the rule is Section 504 of the Indian Financing Act of 1974 (25 U.S.C. 1544); Section 8024 of the DoD Appropriations Act for Fiscal Year 1999 (Public Law 105-262); and Section 8024 of the
DoD Appropriations Act for Fiscal Year 2000 (Public Law 106-79). This rule will apply to all DoD contractors that have the clause at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises, incorporated into their contracts. The proposed rule required use of the clause at FAR 52.226-1 in construction contracts valued at $1,000,000 or more, and in other than construction contracts valued at $500,000 or more, except those awarded using FAR Part 12 (Commercial Item) procedures. As a result of public comments received, and to provide increased opportunity for small business concerns to participate in the Indian Incentive Program, the final rule lowers the dollars threshold for use of the clause to the simplified acquisition threshold ($100,000), for all contracts except those awarded using FAR Part 12 procedures. The rule does not impose any new reporting, recordkeeping, or other compliance requirements, and does not duplicate, overlap, or conflict with any other Federal rules. The rule is expected to have a beneficial effect on small business concerns, because small businesses are now eligible to receive incentive payments for the use of Indian organizations and Indian-owned economic enterprises as subcontractors.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the rule does not impors any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 226
Government procurement. Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR part 226 is amended as follows:
1. The authority citation for 48 CFR part 226 continues to read as follows:
Utilization of Indian Organizations and Indian-Owned Economic Enterprises
DFARS Case 99-D300 Final Rule
PART 226-OTHER SOCIOECONOMIC PROGRAMS
SUBPART 226.1-INDIAN INCENTIVE PROGRAM
226.103 Procedures.
(f) The contracting officer shall[must] submit a request for funding of the Indian incentive to the Office of Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense for [(]Acquisition[,] and Technology[, and Logistics)], [(]OUSD(A&T[AT&L])SADBU[)], Room 2A340, 3061 Defense Pentagon, Washington, DC 20301-3061[1777 North Kent Street, Suite 9100, Arlington, VA 22209]. Upon receipt of funding from OUSD(A&T[AT&L])SADBU, the contracting officer shall[must] issue a contract modification to add the Indian incentive funding for payment of the contractor's request for equitable adjustment as described at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
226.104 Contract clause.
(a) Also use the clause at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises, in contracts-
(i) With contractors that have comprehensive subcontracting plans approved under the test program described at 219.702(a); and
(ii) That contain the clause at 252.219-7004, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (Test Program).
[Use the following prescription instead of the prescription at FAR 26.104(a):
(a) Use the clause at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises, in solicitations and contracts that-
(1) Do not use FAR Part 12 procedures; and
(2) Are for supplies or services expected to exceed the simplified acquisition threshold.]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF DEFENSE
48 CFR Part 252
[DFARS Case 2000-D006]
Defense Federal Acquisition Regulation Supplement; Caribbean Basin Countries
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
SUMMARY: The Acting Director of Defense Procurement has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the determination of the United States Trade Representative (USTR) to renew the treatment of Caribbean Basin Country
end products a eligible products under the Trade Agreements Act, except for end products from the Dominican Republic and Honduras.
EFFECTIVE DATE: April 13, 2000.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition
Regulations Council, PDUSD (AT&L) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0288; telefax (703) 602-0350. Please cite DFARS Case 2000-D006.
SUPPLEMENTARY INFORMATION:
A. Background
The USTR published a notice of 65 FR 9038 on February 23, 2000, to renew the treatment of Caribbean Basin Country end products as eligible products under the Trade Agreements Act, except for end products from the Dominican Republic and Honduras. The clauses at DFARS 252.225-7007,
Buy American Act--Trade Agreements--Balance of Payments Program, and 252.225-7021, Trade Agreements, list the Caribbean Basin countries whose products are eligible products under the Trade Agreements Act. This final rule amends the clauses to remove the Dominican Republic and
Honduras from the list, in accordance with the USTR determination. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
This final rule does not constitute a significant revision within the meaning of FAR 1.501 and Public Law 98-577 and publication for public comment is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2000-D006.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 252
Government procurement. Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR part 252 is amended as follows:
1. The authority citation for 48 CFR part 252 continues to read as follows:
Caribbean Basin Countries
DFARS Case 2000-D006
Final Rule
PART 252-SOLICITATION PROVISIONS AND CONTRACT CLAUSES
* * * * *
252.225-7007 Buy American Act--Trade Agreements--Balance of Payments Program.
As prescribed in 225.408(a)(ii), use the following clause:
BUY AMERICAN ACT--TRADE AGREEMENTS--BALANCE OF
PAYMENTS PROGRAM (MAR 1998[APR 2000])
(a) Definitions. As used in this clause-
(1) "Caribbean Basin country" means-
Antigua and Barbuda Aruba Bahamas Barbados Belize British Virgin Islands Costa Rica Dominica |
El Salvador Grenada Guatemala Guyana Haiti
Jamaica |
Montserrat Netherlands Antilles Nicaragua Panama St. Kitts-Nevis St. Lucia St. Vincent and the Trinidad and Tobago |
* * * * *
252.225-7021 Trade Agreements.
As prescribed in 225.408(a)(iv), use the following clause:
TRADE AGREEMENTS (MAR 1998[APR 2000])
(a) Definitions. As used in this clause-
(1) "Caribbean Basin country" means-
Antigua and Barbuda Aruba Bahamas Barbados Belize British Virgin Islands Costa Rica Dominica |
El Salvador Grenada Guatemala Guyana Haiti
Jamaica |
Montserrat Netherlands Antilles Nicaragua Panama St. Kitts-Nevis St. Lucia St. Vincent and the Grenadines Trinidad and Tobago |
* * * * *
From the Federal Register Online via GPO Access
DEPARTMENT OF DEFENSE
48 CFR Part 235
[DFARS Case 99-D302]
Defense Federal Acquisition Regulation Supplement; Manufacturing Technology Program
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
SUMMARY: The Acting Director of Defense Procurement is adopting as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 216 of the National Defense Authorization Act for Fiscal Year 2000. Section
216 amends statutory provisions pertaining to cost-sharing requirements for contracts under the Manufacturing Technology Program.
EFFECTIVE DATE: April 13, 2000.
FOR FURTHER INFORMATION CONTACT: Ms. Susan L. Schneider, Defense Acquisition Regulations Council, PDUSD(AT&L)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326; telefax (703) 602-0350. Please cite DFARS Case 99-D302.
SUPPLEMENTARY INFORMATION:
A. Background
DoD published an interim rule at 65 FR 2057 on January 13, 2000. (see DFARS Change Notice 20000113) The rule revised DFARS 235.006-70 to implement Section 216 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). Section 216 amended 10 U.S.C. 2525 to eliminate the mandatory cost-sharing requirements for contracts under the Manufacturing Technology Program, and to require that cost sharing be included as a factor in competitive procedures for evaluating proposals under anufacturing technology projects. DoD received no public comments on the interim rule by the date specified for receipt of comments. The interim rule is converted to a final rule without change.
This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD certifies that this final rule will not 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 DoD awards approximately only 20 new contracts under the Manufacturing Technology Program each year.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 235
Government procurement. Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.
Interim Rule Adopted as Final Without Change
Accordingly, the interim rule amending 48 CFR Part 235, which was published at 65 FR 2057 on January 13, 2000, is adopted as a final rule without change.
2 Moved from 225.000-70 (U.S.-made end products deleted because now defined at FAR 25.003) and 225.401.
8 Moved to 225.11, except 225.109(b) and 225.109-70(b) (now 225.171).
15 Moved to Subpart 225.9, except clause prescriptions moved to 225.11, and 225.605 deleted (see next footnote).
16 225.605 is now in the FAR at 25.1101(e)(2).
19 Clause prescriptions moved from 225.109, 225.305, 225.408, 225.605, 225.971, and 225.972.
