[Federal Register Volume 59, Number 3 (Wednesday, January 5, 1994)]
[Rules and Regulations]
[Pages 544-549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-177]
[[Page Unknown]]
[Federal Register: January 5, 1994]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 5, 14, 15, 17, 25, and 52
[FAC 90-19; FAR Case 93-310]
Federal Acquisition Regulation; Implementation of the North
American Free Trade Agreement Implementation Act
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comment.
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SUMMARY: The Department of Defense, General Services Administration,
and National Aeronautics and Space Administration have agreed to an
interim rule implementing the North American Free Trade Agreement
(NAFTA) Implementation Act.
DATES: Effective Date: January 1, 1994. This rule applies to
solicitations issued on or after January 1, 1994.
Comment Date: Comments should be submitted to the FAR Secretariat
on or before March 7, 1994, to be considered in the formulation of a
final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (VRS), 18th & F
Streets, NW., room 4037, Washington, DC 20405. Please cite FAC 90-19,
FAR case 93-310 in all correspondence related to this case.
FOR FURTHER INFORMATION CONTACT:
Mr. Peter O'Such at (202) 501-1759 in reference to this FAR case. For
general information, contact the FAR Secretariat, room 4037, GSA
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-19,
FAR case 93-310.
SUPPLEMENTARY INFORMATION:
A. Background
Chapter Ten of NAFTA requires the three NAFTA countries (the United
States, Canada, and Mexico) to eliminate ``buy national'' restrictions
on non-defense related purchases, by their responsible Federal
Governments, of goods and services provided by firms in North America.
NAFTA applies to most United States Government agencies. The Canadian
Free Trade Agreement is suspended while NAFTA remains in effect.
As required by NAFTA, specified agencies must evaluate certain
NAFTA country end products offers without regard to the restrictions of
the Buy American Act or the Balance of Payments Program. This
evaluation method will apply to offers of Canadian end products under
supply contracts with an estimated value above $25,000 and Mexican end
products under supply contracts with an estimated value of $50,000 or
more, except for the Department of Energy's Power Marketing
Administrations, where the estimated acquisition value is $250,000 or
more. This evaluation method also will apply to construction contracts
with an estimated acquisition value of $6,500,000 or more, except for
the Department of Energy's Power Marketing Administration, where the
estimated acquisition value is $8,000,000 or more.
The applicable rule of origin for NAFTA country end products under
the agreement is that of ``substantial transformation'', which means an
article that is wholly the growth, product, or manufacture of a NAFTA
country or has been substantially transformed in a NAFTA country into a
new and different article may be offered.
This rule also--
(1) Designates NAFTA country end products as eligible products
under the Trade Agreements Act, as implemented in Trade Agreements
under the FAR;
(2) Adds language to require that, when an overseas procurement for
performance overseas is subject to NAFTA, it will be synopsized in
accordance with agency procedures;
(3) Revises the prescriptions for the provisions, Submission of
Offers in the English Language, and Submission of Offers in U.S.
Currency, to clarify and include NAFTA;
(4) Updates the list of designated countries in FAR 25.401 to add
``Portugal'' and revise ``Upper Volta'' to ``Burkina Faso'';
(5) Includes the new threshold of $182,000 for application of the
Trade Agreements Act and the European Community (EC) Agreement, which
is effective January 1, 1994;
(6) Updates FAR 25.407 list of agencies covered by the Agreements
on EC and NAFTA; and
(7) Makes clarifications to the interim rule published in FAC 90-18
(58 FR 31140), at FAR 25.407, to implement the Memorandum of
Understanding between the United States of America and the European
Economic Community on Government Procurement and NAFTA.
B. Regulatory Flexibility Act
The interim rule may 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 the rule
waives the Buy American Act for certain Mexican and Canadian products.
An Initial Regulatory Flexibility Analysis (IRFA) has been prepared and
will be provided to the Chief Counsel for Advocacy for the Small
Business Administration. A copy of the IRFA may be obtained from the
FAR Secretariat. Comments are invited. Comments from small entities
concerning the affected FAR subpart will be considered in accordance
with 5 U.S.C. 610. Such comments must be submitted separately and cite
5 U.S.C. 601, et seq. (FAR Case 93-310), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply
because the new provision at 52.225-20 requires offerors to list the
line item number and country of origin for any end product other than a
domestic end product. Accordingly, a request for clearance of a new
information collection requirement concerning the NAFTA Act is being
submitted to the Office of Management and Budget under 44 U.S.C. 3501,
et seq. Public comments concerning this requirement are invited through
an OMB clearance request appearing in the Federal Register at 58 FR
68636, December 28, 1993.
D. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DOD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that compelling reasons exist to promulgate this interim rule
without prior opportunity for public comment. This action is necessary
because the NAFTA Implementation Act, signed into law on December 8,
1993, becomes effective on January 1, 1994. However, pursuant to Public
Law 98-577 and Federal Acquisition Regulation 1.501, public comments
received in response to this interim rule will be considered in
formulating the final rule.
List of Subjects in 48 CFR Parts 5, 14, 15, 17, 25, and 52
Government procurement.
Dated: December 30, 1993.
Shirley Scott,
Acting Director, Office of Federal Acquisition Policy.
Unless otherwise specified, all Federal Acquisition Regulation
(FAR) and other directive material contained in FAC 90-19 is effective
January 1, 1994.
Dated: December 21, 1993.
Eleanor R. Spector,
Director, Defense Procurement, Department of Defense (DOD).
Dated: December 20, 1993.
Richard H. Hopf, III,
Associate Administrator for Acquisition Policy, General Services
Administration.
Dated: December 21, 1993.
Deidre A. Lee,
Associate Administrator for Procurement, NASA.
Therefore, 48 CFR parts 5, 14, 15, 17, 25, and 52 are amended as
set forth below:
1. The authority citation for 48 CFR parts 5, 14, 15, 17, 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 5--PUBLICIZING CONTRACT ACTIONS
2. Section 5.202 is amended in paragraph (a)(12) by adding a third
sentence to read as follows:
5.202 Exceptions.
(a) * * *
(12) * * * This exception also does not apply to North American
Free Trade Agreement contract actions, which will be synopsized in
accordance with agency regulations.
* * * * *
PART 14--SEALED BIDDING
3. Section 14.201-6 is amended by revising paragraphs (x) and (y)
to read as follows:
14.201-6 Solicitation provisions.
* * * * *
(x) The provision at 52.214-34, Submission of Offers in the English
Language, is required in solicitations subject to the Trade Agreements
Act or the North American Free Trade Agreement Implementation Act (see
25.408(d)). It may be included in other solicitations when the
contracting officer decides that it is necessary.
(y) The provision at 52.214-35, Submission of Offers in U.S.
Currency, is required in solicitations subject to the Trade Agreements
Act or the North American Free Trade Agreement Implementation Act (see
25.408(d)). It may be included in other solicitations when the
contracting officer decides that it is necessary.
4. Section 14.408-1 is amended by revising the introductory text of
paragraph (a)(2) to read as follows:
14.408-1 Award of unclassified contracts.
(a) * * *
(2) For acquisitions subject to the Trade Agreements Act or the
North American Free Trade Agreement (NAFTA) Implementation Act (see
25.405(e)), agencies shall promptly, but in no event later than 7
working days after award, give unsuccessful offerors from designated or
NAFTA countries written notice stating--
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
5. Section 15.407 is amended by revising paragraphs (l) and (m) to
read as follows:
15.407 Solicitation provisions.
* * * * *
(l) The provision at 52.214-34, Submission of Offers in the English
Language, is required in solicitations subject to the Trade Agreements
Act or the North American Free Trade Agreement Implementation Act (see
25.408(d)). It may be included in other solicitations when the
contracting officer decides that it is necessary.
(m) The provision at 52.214-35, Submission of Offers in U.S.
Currency, is required in solicitations subject to the Trade Agreements
Act or the North American Free Trade Agreement Implementation Act (see
25.408(d)). It may be included in other solicitations when the
contracting officer decides that it is necessary.
6. Section 15.1001 is amended by revising paragraph (c)(2) to read
as follows:
15.1001 Notifications to unsuccessful offerors.
* * * * *
(c) * * *
(2) For acquisitions subject to the Trade Agreements Act or the
North American Free Trade Agreement (NAFTA) Implementation Act (see
25.405(e)), the information in paragraph (c)(1) of this section shall
be provided to unsuccessful offerors from designated or NAFTA countries
promptly, but in no event later than seven working days after contract
award.
* * * * *
PART 17--SPECIAL CONTRACTING METHODS
7. Section 17.203 is amended by revising paragraph (h) to read as
follows:
17.203 Solicitations.
* * * * *
(h) See 25.402(a)(5) regarding use of options in calculating the
estimated contract amount for application of the Trade Agreements Act
and North American Free Trade Agreement thresholds.
PART 25--FOREIGN ACQUISITION
25.101 [Amended]
8. Section 25.101 is amended in the definition Domestic end product
by removing the last sentence.
9. Section 25.109 is amended by revising paragraphs (d) and (f),
redesignating paragraph (g)(2) as (g)(3), and adding a new paragraph
(g)(2) to read as follows:
25.109 Solicitation provisions and contract clauses.
* * * * *
(d) Except as provided in paragraph (g) of this section, or when
the clause prescribed by paragraph (f) is used, or when the clause
prescribed in 25.408(a)(4) is used, the contracting officer shall
insert the clause at 52.225-3, Buy American Act-Supplies, in
solicitations and contracts for the acquisition of supplies, or for
services involving the furnishing of supplies, for use within the
United States.
* * * * *
(f) Except as provided in paragraph (g) of this section, the
contracting officer shall insert the clause at 52.225-17, Buy American
Act-Supplies under European Community Agreement, in solicitations and
contracts for the acquisition of supplies, or for services involving
the furnishing of supplies when the estimated acquisition value meets
or exceeds $182,000 for the agencies listed at FAR 25.407, except for
the Power Marketing Administrations' segment of the Department of
Energy, where the estimated acquisition value is $450,000 of more.
(g) * * *
(2) The acquisition is made under the Trade Agreements Act (see
subpart 25.4); or
* * * * *
25.202 [Amended]
10. Section 25.202 is amended in paragraph (c) by removing
``25.402(a)(4)'' and inserting ``25.402(a) (3) and (4)''.
11. Section 25.205 is amended by revising paragraph (b) to read as
follows:
25.205 Solicitation provision and contract clause.
* * * * *
(b) For construction contracts with an estimated acquisition value
of $6,500,000 ($8,000,000 for the Power Marketing Administrations) or
more, to be awarded by agencies listed in 25.407, insert the clause at
52.225-15, Buy American Act-Construction Materials under European
Community and North American Free Trade Agreements, in solicitations
and contracts for construction.
12. Section 25.300 is amended by revising the second sentence to
read as follows:
25.300 Scope of subpart.
* * * The Balance of Payments Program restrictions have been waived
with respect to the acquisition, in accordance with subpart 25.4, of
certain products under the Trade Agreements Act of 1979 and the North
American Free Trade Agreement (NAFTA) Implementation Act.
25.305 [Amended]
13. Section 25.305 is amended in paragraphs (a) and (c) by adding
``or NAFTA'' after ``1979''.
14. Section 25.400 is amended by revising paragraph (c) to read as
follows:
25.400 Scope of subpart.
* * * * *
(c) Acquisitions involving offers of Canadian or Mexican end
products under the North American Free Trade Agreement (NAFTA), as
approved by Congress in the NAFTA Implementation Act (Pub. L. 103-182,
107 Stat. 2057);
* * * * *
15. Section 25.401 is amended by revising the definitions for
``Canadian end product'' and ``Eligible product''; amending the
``designated country'' list by removing ``Upper Volta'' and adding in
alphabetical order ``Burkina Faso'' and ``Portugal''; and adding in
alphabetical order the definitions ``Mexican end product'', ``North
American Free Trade Agreement (NAFTA) country'', ``NAFTA country
construction material'', and ``NAFTA country end product'' to read as
follows:
25.401 Definitions.
Canadian end product, as used in this subpart, means an article
that (a) is wholly the growth, product, or manufacture of Canada, or
(b) in the case of an article which consists in whole or in part of
materials from another country or instrumentality, has been
substantially transformed in Canada into a new and different article of
commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term includes
services (except transportation services) incidental to its supply;
provided, that the value of those incidental services does not exceed
that of the product itself. It does not include service contracts as
such.
* * * * *
Eligible product, as used in this subpart, means a designated,
North American Free Trade Agreement (NAFTA), or Caribbean Basin country
end product.
* * * * *
Mexican end product, as used in this subpart, means an article that
(a) is wholly the growth, product, or manufacture of Mexico, or (b) in
the case of an article which consists in whole or in part of materials
from another country or instrumentality, has been substantially
transformed in Mexico into a new and different article of commerce with
a name, character, or use distinct from, that of the article or
articles from which it was transformed. The term includes services
(except transportation services) incidental to its supply; provided,
that the value of those incidental services does not exceed that of the
product itself. It does not include service contracts as such.
North American Free Trade Agreement (NAFTA) country, as used in
this subpart, means Canada or Mexico.
NAFTA country construction material, means a construction material
that (a) is wholly the growth, product, or manufacture of a NAFTA
country or (b) in the case of a construction material which consists in
whole or in part of materials from another country or instrumentality,
has been substantially transformed in a NAFTA country into a new and
different construction material distinct form the materials from which
it was transformed.
NAFTA country end product, as used in this subpart, means a
Canadian end product or a Mexican end product.
16. Section 25.402 is amended--
(a) In paragraph (a)(1) by inserting a new sentence after the first
sentence;
(b) By revising paragraph (a)(3);
(c) In the introductory text of paragraph (a)(4) by inserting
``(European Community Agreement)'' after ``Procurement''; in (a)(4)(i)
by revising ``25.406 or'' to read ``25.407''; and in (a)(4)(ii) by
revising ``$176,000'' to read ``$182,000'';
(d) In paragraphs (a)(5) introductory text and (a)(6) by inserting
``or NAFTA'' after `'Act''; and
(e) By removing ``country'' the first time it appears in the
introductory text of paragraph (f) and the second time it appears in
paragraph (f)(2) and inserting'', North American Free Trade
Agreement,'' in their places.
The revised text reads as follows:
25.402 Policy.
(a)(1) * * * The current threshold is $182,000. * * *
* * * * *
(3) As required by the North American Free Trade Agreement (NAFTA)
Implementation Act (Pub. L. 103-182, 107 Stat. 2057), agencies shall
evaluate offers of the following NAFTA country end products without
regard to the restrictions of the Buy American Act (see subpart 25.1)
or the Balance of Payments Program (see subpart 25.3):
(i) NAFTA country construction materials under construction
contracts with an estimated acquisition value of $6,500,000 or more for
the agencies in 25.407, except for the Power Marketing Administration
segments of the Department of Energy where the estimated acquisition
value is $8,000,000 or more.
(ii) Canadian end products under supply contracts with an estimated
value above $25,000 and Mexican end products under supply contracts
with an estimated value of $50,000 or more for the agencies in 25.407,
except for the Power Marketing Administrations' segment of the
Department of Energy, where the estimated acquisition value is $250,000
or more.
* * * * *
17. Section 25.403 is amended in paragraph (a) by removing ``Trade
Agreements Act''; by revising paragraph (b); in paragraph (e) by
inserting ``(3) and'' after ``25.402(a)''; in paragraph (h) by revising
``25.402(a)(4)(ii)'' to read ``25.402(a)(3) and (4)''; and revising
paragraph (l) to read as follows:
25.403 Exceptions.
* * * * *
(b) Products of countries (1) not identified in 25.401 as
designated, Caribbean Basin, or North American Free Trade Agreement
countries, or (2) barred by 25.402(c);
* * * * *
(l)(1) For purchases subject to North American Free Trade Agreement
or the European Community Agreement, agencies not listed at 25.407;
(2) For other purchases under this subpart, agencies not listed at
25.406; or
* * * * *
25.405 [Amended]
18. Section 25.405 is amended in the introductory text by inserting
``or North American Free Trade Agreement (NAFTA)'' after ``Act''; in
paragraph (d) by removing ``countries'' the first time it appears and
inserting ``, NAFTA,'' in its place; and in paragraph (e) by inserting
``or NAFTA'' after ``designated''.
19. Section 25.406 is amended by revising the ``General Services
Administration'' entry and adding in alphabetical order ``National
Archives and Records Administration'' to read as follows:
25.406 Agencies covered by the Agreement on Government Procurement.
* * * * *
General Services Administration (except Federal Supply Groups 51
and 52 and Federal Supply Class 7340).
* * * * *
National Archives and Records Administration.
* * * * *
20. Section 25.407 is amended by revising the section heading;
removing the introductory paragraph; redesignating paragraphs (a) thru
(d) as (b) thru (e), and adding a new paragraph (a); changing ``is'' to
``are'' in newly redesignated (d); and adding paragraphs (f) and (g) to
read as follows:
25.407 Agencies covered by the European Community and North American
Free Trade Agreements.
(a) The agencies listed in 25.406.
* * * * *
(f) Federal Housing Finance Board.
(g) Office of Thrift Supervision.
21. Section 25.408 is amended by removing ``Act'' following
``Agreements'' from paragraph (a)(1) and (a)(2) the first time it
appears; by removing ``and'' at the end of paragraph (a)(1); by
removing the period at the end of paragraph (a)(2) and inserting a
semicolon in its place; by adding new paragraphs (a)(3) and (a)(4); by
revising paragraph (c); and in paragraph (d) by inserting ``or NAFTA''
following ``Act'' to read as follows:
25.408 Solicitation provision and contract clause.
(a) * * *
(3) The provision at 52.225-20, Buy American Act-North American
Free Trade Agreement (NAFTA) Implementation Act-Balance of Payments
Program Certificate, in solicitations containing the clause at 52.225-
21; and
(4) The clause at 52.225-21, Buy American Act-North American Free
Trade Agreement (NAFTA) Implementation Act-Balance of Payments Program,
where the contracting officer has determined that the acquisition is
not subject to the Trade Agreements Act but is subject to NAFTA.
* * * * *
(c) The clause prescriptions at paragraph (a) of this section shall
apply where any item under a multiple item solicitation is determined
to be subject to the Trade Agreements Act or North American Free Trade
Agreement Implementation Act. If the Acts do not apply to all of the
items being solicited, the contracting officer shall indicate, in the
schedule, those items that are exempt.
* * * * *
25.1003 [Amended]
22. Section 25.1003 is amended in paragraphs (a)(2) and (b)(2) by
revising ``$176,000'' to read ``$182,000''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.225-3 [Amended]
23. Section 52.225-3 is amended by revising the date of the clause
to read ``(JAN 1994)''; by removing the last sentence from the
definition ``Domestic end product''; and removing the parenthetical
following paragraph (b)(4).
24. Section 52.225-8 is amended in the section and clause headings
by removing ``Act'' following ``Agreements'', and revising the date of
the clause heading to read ``(JAN 1994)''; in paragraph (a) by removing
``Act'' following ``Agreements'', and inserting ``a North American Free
Trade Agreement (NAFTA) country,'' following ``designated country,'';
by revising the introductory text of paragraph (c) and paragraph
(c)(1); and in paragraph (c)(2) by removing ``Act'' following
``Agreements''. The revised text reads as follows:
Sec. 52.225-8 Buy American Act--Trade Agreements--Balance of Payments
Program Certificate.
* * * * *
Buy American Act--Trade Agreements--Balance of Payments Program
Certificate (Jan 1994)
* * * * *
(c) Offers will be evaluated by giving certain preferences to
domestic end products, designated country end products, NAFTA
country end products, and Caribbean Basin country end products over
other end products. In order to obtain these preferences in the
evaluation of each excluded end product listed in paragraph (b) of
this provision, offerors must identify and certify below those
excluded end products that are designated or NAFTA country end
products, or Caribbean Basin country end products. Products that are
not identified and certified below will not be deemed designated
country end products, NAFTA country end products, or Caribbean Basin
country end products. Offerors must certify by inserting the
applicable line item numbers in the following:
(1) The offeror certifies that the following supplies qualify as
``designated or NAFTA country end products'' as those terms are
defined in the clause entitled ``Buy American Act--Trade
Agreements--Balance of Payments Program:''
(Insert line item numbers)
* * * * *
25. Section 52.225-9 is amended in the section and clause headings
by removing ``Act'' following ``Agreements'', and revising the date of
the clause heading to read ``(JAN 1994)''; by revising the introductory
text of paragraph (a) and adding in alphabetical order the definitions
``NAFTA country'', and ``NAFTA country end product''; and revising
paragraph (b) to read as follows:
Sec. 52.225-9 Buy American Act--Trade Agreements--Balance of Payments
Program.
* * * * *
Buy American Act--Trade Agreements--Balance of Payments Program (Jan
1994)
(a) This clause implements the Buy American Act (41 U.S.C. 10),
the Trade Agreements Act of 1979 (19 U.S.C. 2501-2582), the North
American Free Trade Agreement (NAFTA) Implementation Act (Pub. L.
103-182, 107 Stat. 2057) and the Balance of Payments Program by
providing a preference for domestic end products over foreign end
products, except for certain foreign end products which meet the
requirements for classification as designated, NAFTA, or Caribbean
Basin country end products.
* * * * *
NAFTA country, as used in this clause, means Canada or Mexico.
NAFTA country end product, as used in this clause, means an
article that (1) is wholly the growth, product, or manufacture of a
NAFTA country, or (2) in the case of an article which consists in
whole or in part of materials from another country or
instrumentality, has been substantially transformed in a NAFTA
country into a new and different article of commerce with a name,
character, or use distinct from that of the article or articles from
which it was transformed. The term includes services (except
transportation services) incidental to its supply; provided, that
the value of those incidental services does not exceed that of the
product itself. It does not include service contracts as such.
(b) The Contracting Officer has determined that the Trade
Agreements Act and NAFTA apply to this acquisition. Unless otherwise
specified, the Acts apply to all items in the schedule. The
Contractor agrees to deliver under this contract only domestic end
products unless, in its offer, it specifies delivery of foreign end
products in the provision entitled ``Buy American Act--Trade
Agreements--Balance of Payments Program Certificate.'' An offer
certifying that a designated, NAFTA, or Caribbean Basin country end
product will be supplied requires the Contractor to supply a
designated, NAFTA, or Caribbean Basin country end product or, at the
Contractor's option, a domestic end product. Contractors may not
supply a foreign end product for line items subject to the Trade
Agreements Act unless the foreign end product is a designated,
NAFTA, or Caribbean end product (see FAR 25.401), or unless a waiver
is granted under section 302 of the Trade Agreements Act of 1979
(see FAR 25.402(c)).
* * * * *
26. Section 52.225-15 is amended in the section and clause headings
by removing ``Agreement'' and inserting ``and North American Free Trade
Agreements''; by revising the date of the clause heading to read ``(JAN
1994)''; in paragraph (a) by adding in alphabetical order the
definitions ``North American Free Trade Agreement (NAFTA) country'',
and ``NAFTA country construction material''; and by revising paragraphs
(b) and (c) to read as follows:
52.225-15 Buy American Act--Construction Materials under European
Community and North American Free Trade Agreements.
* * * * *
Buy American Act--Construction Materials Under European Community and
North American Free Trade Agreements (Jan 1994)
* * * * *
North American Free Trade Agreement (NAFTA) country means Canada
or Mexico.
NAFTA country construction material means a construction
material that (1) is wholly the growth, product, or manufacture of a
NAFTA country, or (2) in the case of a construction material which
consists in whole or in part of materials from another country or
instrumentality, has been substantially transformed in a NAFTA
country into a new and different construction material distinct from
the materials from which it was transformed.
(b) The Buy American Act (41 U.S.C. 10) provides that the
Government give preference to domestic material. In addition, the
Memorandum of Understanding between the United States of America and
the European Economic Community on Government Procurement, and the
North American Free Trade Agreement (NAFTA), provide that EC and
NAFTA construction materials are exempted from application of the
Buy American Act.
(c) The Contractor agrees that only domestic construction
materials, NAFTA country construction materials or EC construction
materials will be used by the Contractor, subcontractors,
materialmen and suppliers in the performance of this contract,
except for other foreign construction materials, if any, listed in
this contract.
(End of clause)
27. Section 52.225-17 is amended in the clause heading by revising
the date to read ``(JAN 1994)''; in the definition ``Domestic end
product'' by removing the last sentence; by removing the parenthetical
following paragraph (c)(4); and by adding paragraph (d) to read as
follows:
52.225-17 Buy American Act--Supplies under European Community
Agreement.
* * * * *
Buy American Act--Supplies Under European Community Agreement (Jan
1994)
* * * * *
(d) If this contract contains the clause at 52.225-21, Buy
American Act--North American Free Trade Agreement (NAFTA)
Implementation Act--Balance of Payments Program, the Contractor may
deliver NAFTA country end products, notwithstanding the prohibition
in paragraph (c).
(End of clause)
28. Section 52.225-19 is amended in the clause heading by revising
the date to read ``(JAN 1994)''; and by revising paragraph (b) to read
as follows:
52.225-19 European Community Sanction for Services.
* * * * * *
European Community Sanction for Services (Jan 1994)
* * * * *
(b) Agreement. The Contractor agrees not to perform services
under this contract in a sanctioned member state of the EC. This
does not apply to subcontracts.
(End of clause)
29. Sections 52.225-20 and 52.225-21 are added to read as follows:
52.225-20 Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program Certificate.
As prescribed in 25.408(a)(3), insert the following provision:
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program Certificate (Jan 1994)
(a) The offeror hereby certifies that each end product, except
those listed in paragraph (b) of this provision, is a domestic end
product (as defined in the clause entitled ``Buy American Act--North
American Free Trade Agreement (NAFTA) Implementation Act--Balance of
Payments Program'') and that components of unknown origin have been
considered to have been mined, produced, or manufactured outside the
United States.
(b) Excluded End Products:
------------------------------------------------------------------------
Line item No. Country of origin
------------------------------------------------------------------------
(List as necessary)
------------------------------------------------------------------------
(c) Offers will be evaluated by giving certain preferences to
domestic end products or NAFTA country end products over other end
products. In order to obtain these preferences in the evaluation of
each excluded end product listed in paragraph (b) of this provision,
offerors must identify and certify below those excluded end products
that are NAFTA country end products. Products that are not
identified and certified below will not be deemed NAFTA country end
products. Offerors must certify by inserting the applicable line
item numbers in the following:
(1) The offeror certifies that the following supplies qualify as
``NAFTA country end products'' as that term is defined in the clause
entitled ``Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program:''
----------------------------------------------------------------------
(Insert line item numbers)
(d) Offers will be evaluated in accordance with FAR part 25.
(End of provision)
52.225-21 Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program.
As prescribed in 25.408(a)(4), insert the following clause:
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program (Jan 1994)
(a) Definitions. As used in this clause--
Components means those articles, materials, and supplies
incorporated directly into the end products.
Domestic end product means (1) an unmanufactured end product
mined or produced in the United States, or (2) an end product
manufactured in the United States, if the cost of its components
mined, produced, or manufactured in the United States exceeds 50
percent of the cost of all its components. A component shall also be
considered to have been mined, produced, or manufactured in the
United States (regardless of its source in fact) if the end product
in which it is incorporated is manufactured in the United States and
the component is of a class or kind (i) determined by the
Government, to be not mined, produced, or manufactured in the United
States in sufficient and reasonably available commercial quantities
of a satisfactory quality, or (ii) to which the agency head
concerned has determined that it would be inconsistent with the
public interest to apply the restrictions of the Buy American Act.
End products means those articles, materials, and supplies to be
acquired under this contract for public use.
Foreign end product means an end product other than a domestic
end product.
North American Free Trade Agreement (NAFTA) country means Canada
or Mexico.
NAFTA country end product means an article that (1) is wholly
the growth, product, or manufacture of a NAFTA country, or (2) in
the case of an article which consists in whole or in part of
materials from another country or instrumentality, has been
substantially transformed in a NAFTA country into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was
transformed. The term includes services (except transportation
services) incidental to its supply; provided, that the value of
those incidental services does not exceed that of the product
itself. It does not include service contracts as such.
(b) This clause implements the Buy American Act (41 U.S.C. 10),
the North American Free Trade Agreement Implementation Act (Pub. L.
103-182, 107 Stat. 2057), and the Balance of Payments Program by
providing a preference for domestic end products over foreign end
products, except for certain foreign end products which meet the
requirements for classification as NAFTA country end products.
(c) The Contracting Officer has determined that the NAFTA
applies to this acquisition. Unless otherwise specified, the Act
applies to all items in the schedule. The Contractor agrees to
deliver under this contract only domestic end products unless, in
its offer, it specifies delivery of foreign end products in the
provision entitled ``Buy American Act--North American Free Trade
Agreement Implementation Act--Balance of Payments Program
Certificate.'' An offer certifying that a NAFTA country end product
will be supplied requires the Contractor to supply a NAFTA country
end product or, at the Contractor's option, a domestic end product.
(d) If the contract contains the clause at 52.225-17, Buy
American Act--Supplies under European Community Agreement, the
Contractor may deliver EC country end products notwithstanding the
provisions of paragraph (c).
(e) Offers will be evaluated in accordance with the policies and
procedures of subpart 25.4 of the Federal Acquisition Regulation.
(End of clause)
[FR Doc. 94-177 Filed 1-4-94; 8:45 am]
BILLING CODE 6820-34-M
