01-30538. Federal Acquisition Regulation; Definitions of “Component” and “End Product”

AGENCIES:

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

ACTION:

Final rule.

SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to restore the unique (Part 25) definitions of “component” and “end product” for acquisition of supplies. In addition, the Councils have made minor revisions to the definitions of “component” and “cost of components” for acquisition of construction.

DATES:

Effective Date: February 19, 2002.

FOR FURTHER INFORMATION CONTACT:

The FAR Secretariat, Room 4035, GS Building, Washington, DC, 20405, [phone], for information pertaining to status or publication schedules. For clarification of content, contact Ms. Cecelia L. Davis, Procurement Analyst, at [phone]. Please cite FAC 2001-02, FAR case 2000-015.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule restores unique definitions of “component” and “end product” at FAR 25.003, and amends the definitions at FAR 2.101 and associated clauses 52.225-1, Buy American Act—Balance of Payments Program—Supplies; 52.225-3, Buy American Act—North American Free Trade Agreement—Israeli Trade Act—Balance of Payments Program; and 52.225-5, Trade Agreements, to comply with these definitions. The final rule under FAR case 97-024, Foreign Acquisition (Part 25 Rewrite), published in the Federal Register at 64 FR 72416, December 27, 1999, removed the unique Part 25 definitions of “component” and “end product,” applying standard definitions in Part 2 to Part 25 and associated clauses (other than clauses for construction). The Councils did not intend to make any substantive change to the FAR by these amendments. Because the Councils received comments addressing potential unintended substantive changes to the FAR that might result from these amendments, the Councils are reverting to the original definitions, with minor editorial corrections.

In addition, this rule revises the definition of “components” in FAR clauses 52.225-9, Buy American Act—Balance of Payments Program—Construction Materials, and 52.225-11, Buy American Act—Balance of Payments Program—Construction Materials under Trade Agreements, to a definition of the singular term “component” and revises the definition of “cost of components” in these clauses to address components of construction material, rather than components of an end product (which is not applicable to construction).

This is not a significant regulatory action, and therefore, was not subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

The final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98-577, and publication for public comments is not required. However, the Councils will consider comments from small entities concerning the affected FAR parts 2, 25, and 52 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (FAC 2001-02, FAR case 2000-015), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose 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 2, 25, and 52

• Government procurement

Dated: December 5, 2001.

Al Matera,

Director, Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 25, and 52 as set forth below:

1. The authority citation for 48 CFR parts 2, 25, and 52 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

PART 2—DEFINITIONS OF WORDS AND TERMS

2. Amend section 2.101 by revising the definitions “Component” and “End product” to read as follows:

2.101

Definitions.

* * * * *

Component means any item supplied to the Government as part of an end item or of another component, except that for use in—

(1) Part 25, see the definition in 25.003;

(2) 52.225-1 and 52.225-3, see the definition in 52.225-1(a) and 52.225-3(a); and

(3) 52.225-9 and 52.225-11, see the definition in 52.225-9(a) and 52.225-11(a).

* * * * *

End product means supplies delivered under a line item of a Government contract, except for use in part 25 and the associated clauses at 52.225-1, 52.225-3, and 52.225-5, see the definitions in 25.003, 52.225-1(a), 52.225-3(a), and 52.225-5(a).

* * * * *

PART 25—FOREIGN ACQUISITION

3. In section 25.003 add, in alphabetical order, the definitions “Component” and “End product”; and amend paragraph (1) of the definition “Cost of components” by removing “product” and adding “product or construction material” in its place. The added text reads as follows:

25.003

Definitions.

* * * * *

Component means an article, material, or supply incorporated directly into an end product or construction material.

* * * * *

End product means those articles, materials, and supplies to be acquired for public use.

* * * * *

PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Amend section 52.225-1 by revising the date of the clause and the definitions “Component” and “End product” to read as follows:

52.225-1

Buy American Act—Balance of Payments Program—Supplies.

* * * * *

Buy American Act—Balance of Payments Program—Supplies (Feb 2002)

(a) * * *

Component means an article, material, or supply incorporated directly into an end product.

* * * * *

End product means those articles, materials, and supplies to be acquired under the contract for public use.

* * * * *

5. Amend section 52.225-3 by revising the date of the clause and the definitions “Component” and “End product” to read as follows:

52.225-3

Buy American Act—North American Free Trade Agreement—Israeli Trade Act—Balance of Payments Program.

* * * * *

Buy American Act—North American Free Trade Agreement—Israeli Trade Act—Balance of Payments Program (Feb 2002)

(a) * * *

Component means an article, material, or supply incorporated directly into an end product.

* * * * *

End product means those articles, materials, and supplies to be acquired under the contract for public use.

* * * * *

6. Amend section 52.225-5 by revising the date of the clause and the definition “End product” to read as follows:

52.225-5

Trade Agreements.

* * * * *

Trade Agreements (Feb 2002)

(a) * * *

End product means those articles, materials, and supplies to be acquired under the contract for public use.

* * * * *

7. Amend section 52.225-9 by revising the date of the clause and the definition “Component”; and by amending the definition “Cost of components” in paragraph (1) by removing “end product” and adding “construction material” in its place. The revised text reads as follows:

52.225-9

Buy American Act—Balance of Payments Program—Construction Materials.

* * * * *

Buy American Act—Balance of Payments Program—Construction Materials (Feb 2002)

(a) * * *

Component means an article, material, or supply incorporated directly into a construction material.

* * * * *

8. Amend section 52.225-11 by revising the date of the clause and the definition “Component”; and by amending the definition “Cost of components” in paragraph (1) by removing “end product” and adding “construction material” in its place. The revised text reads as follows:

52.225-11

Buy American Act—Balance of Payments Program—Construction Materials under Trade Agreements.

* * * * *

Buy American Act—Balance of Payments Program—Construction Materials Under Trade Agreements (Feb 2002)

(a) * * *

Component means an article, material, or supply incorporated directly into a construction material.

* * * * *