2010-13526. Defense Federal Acquisition Regulation Supplement; Finland- Public Interest Exception to the Buy American Act

AGENCY:

Defense Acquisition Regulations System; Department of Defense (DoD).

ACTION:

Final rule.

SUMMARY:

DoD is issuing this final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to reflect a determination of the Secretary of Defense that it is inconsistent with the public interest to apply the restrictions of the Buy American Act to the acquisition of articles, materials, and supplies produced or manufactured in Finland.

DATES:

Effective Date: June 8, 2010.

FOR FURTHER INFORMATION CONTACT:

Ms. Amy Williams, 703-602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

A reciprocal defense procurement memorandum of understanding (RDP MOU) between the government of Finland and the Government of the United States has been in effect since 1991. The governments have negotiated and concluded a new RDP MOU to provide an updated basis for continued cooperation in defense procurement. The RDP MOU provides that, in relation to defense procurement, each country will accord to the industries of the other country treatment no less favorable than that accorded to its own industries, to the extent consistent with its laws, regulations, and international obligations.

The reciprocal opportunities that the RDP MOU affords to the governments and their defense industries enhances mutual military readiness and promotes standardization and interoperability of equipment between the armed forces of the two countries. Therefore, DoD has made a blanket determination that it is inconsistent with the public interest to apply the restrictions of the Buy American Act to the acquisition of articles, materials, and supplies produced or manufactured in Finland.

DoD is issuing this rule as a final rule because this rule does not have a significant effect beyond the internal operating procedures of DoD and does not have a significant cost or administrative impact on contractors or offerors. Therefore, public comment is not required in accordance with 41 U.S.C. 418b(a).

“Qualifying country” is defined at 225.003(10). The status as a qualifying country entitles these countries to various benefits, both as a matter of DoD policy and as legislated by Congress. The evaluation procedures at DFARS subpart 225.5 treat all qualifying country end products equally. Finland is a qualifying country, as listed at 225.003(10), entitled to all these benefits. However, at DFARS 225.872-1, the qualifying countries are divided into two lists. Most are listed in paragraph (a), but a few are listed in paragraph (b). For the countries in paragraph (a), DoD has already made a blanket determination of the inapplicability of the Buy American Act to the acquisition of end products from that country. There is only one effect of a country being listed in paragraph (b). Although the evaluation procedures are the same, regardless of which paragraph a country is listed in, if an end product is from a country listed in paragraph (b), when purchasing the end product, the contracting officer has to prepare an individual determination and finding that the end product is exempt from application of the Buy American Act. Over time, the qualifying countries in paragraph (b) are moved to paragraph (a) when all the conditions for arriving at a blanket determination are met.

This final rule implements the recent blanket determination by USD(AT&L) at DFARS 225.872-1 by removing Finland from the list of qualifying countries in paragraph (b) and adding Finland to the list of qualifying countries in paragraph (a). This means that the contracting officer no longer needs to prepare an individual determination and findings when making an award to an offeror of an end product from Finland. However, since Finland is a qualifying country, this was a routine paperwork requirement, and the removal of this requirement only impacts the internal operating procedures of the Government.

This rule was subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule. This final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501 and public comment is not required in accordance with 41 U.S.C. 418b(a).

C. Paperwork Reduction Act

This rule does not impose any new 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 225

• Government procurement

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 225 is amended as follows:

PART 225—FOREIGN ACQUISITION

1. The authority citation for 48 CFR part 225 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

2. Section 225.872-1 is amended by revising paragraphs (a) and (b) to read as follows:

225.872-1

General.

(a) As a result of memoranda of understanding and other international agreements, DoD has determined it inconsistent with the public interest to apply restrictions of the Buy American Act or the Balance of Payments Program to the acquisition of qualifying country end products from the following qualifying countries:

Australia

Belgium

Canada

Denmark

Egypt

Federal Republic of Germany

Finland

France

Greece

Israel

Italy

Luxembourg

Netherlands

Norway

Portugal

Spain

Sweden

Switzerland

Turkey

United Kingdom of Great Britain and Northern Ireland.

(b) Individual acquisitions of qualifying country end products from the following qualifying country may, on a purchase-by-purchase basis (see 225.872-4), be exempted from application of the Buy American Act and the Balance of Payments Program as inconsistent with the public interest: Austria

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