![](media/image1.wmf){width="0.8243055555555555in"
height="0.6888888888888889in"} Procurement Notice

National Aeronautics and

Space Administration

Washington, DC 20546

##  PN 97-82

### March 12, 2003 

# TRADE AGREEMENTS ACT---EXCEPTION FOR U. S.-MADE END PRODUCTS

***BACKGROUND:*** This PN revises the NASA FAR Supplement to implement
the determination of the Assistant Administrator for Procurement that,
for procurements subject to the Trade Agreements Act, it would be
inconsistent with the public interest to apply the Buy American Act for
U.S.-made end products that are substantially transformed in the United
States.

***ACQUISITIONS AFFECTED BY CHANGES:*** All procurements subject to the
Trade Agreements Act.

***ACTION REQUIRED BY CONTRACTING OFFICERS:*** Comply with existing
procedures at FAR 25.1101(c)(1).

***CLAUSE CHANGES:*** This PN makes no changes to clauses or provisions.

***PARTS AFFECTED:*** Changes are made in Part 1825.

***REPLACEMENT PAGES:*** You may use the enclosed pages to Part1825.

***TYPE OF RULE AND PUBLICATION DATE:*** The PN was published as a final
rule in the Federal Register (68 FR 11747 - 11748) on March 12, 2003.

***HEADQUARTERS CONTACT:*** Patrick Flynn, Code HK, (202) 358-0460,
email: Patrick.Flynn@nasa.gov.

R. Scott Thompson

Director, Contract Management Division

Enclosures

DISTRIBUTION:

**PN List**

PART 1825

**FOREIGN ACQUISITION**

**TABLE OF CONTENTS**

1825.003 Definitions.

1825.003-70 NASA definitions.

**SUBPART 1825.1 BUY AMERICAN ACT\--SUPPLIES**

1825.103 Exceptions

**SUBPART 1825.4 TRADE AGREEMENTS**

1825.400 Scope of subpart.

**SUBPART 1825.9 CUSTOMS AND DUTIES**

1825.901 Policy.

1825.903 Exempted supplies.

**SUBPART 1825.10 ADDITIONAL FOREIGN ACQUISITION**

**REGULATIONS**

1825.1001 Waiver of right to examination of records.

1825.1002 Use of foreign currency.

**SUBPART 1825.11 SOLICITATION PROVISIONS AND CONTRACT**

**CLAUSES**

1825.1101 Acquisition of Supplies.

1825.1103 Other provisions and clauses.

1825.1103-70 Export control.

**SUBPART 1825.70 FOREIGN CONTRACTS AND INTERNATIONAL**

**AGREEMENT CLEARANCES**

1825.7000 Scope of subpart.

1825.7001 Definition.

1825.7002 Foreign Contracts.

1825.7003 International Agreements.

**PART 1825**

**FOREIGN ACQUISITION**

**1825.003 Definitions.**

**1825.003-70 NASA definitions.**

**\"Canadian end product",** for an item with an estimated value of
\$25,000 or less, means an unmanufactured end product mined or produced
in Canada or an end product manufactured in Canada, if the cost of its
components mined, produced, or manufactured in Canada or the United
States exceeds 50 percent of the cost of all its components. The cost of
components includes transportation costs to the place of incorporation
into the end product. For an end product with an estimated value in
excess of \$25,000, the definition at FAR 25.401 applies.

**Subpart** **1825.1\--Buy American Act\--Supplies**

**1825.103 Exceptions.**

(a)**(i)** The procurement officer shall send proposed public interest
determinations to the Assistant Administrator for Procurement (Code HS)
for approval.

**(ii)** The Assistant Administrator for Procurement has determined that
it is inconsistent with the public interest to apply restrictions of the
Buy American Act to Canadian end products with estimated values of
\$25,000 or less as defined in 1825.003-70. Accordingly, contracting
officers must evaluate all offers for such Canadian end products on a
parity with offers for domestic end products, except that applicable
duty (whether or not a duty free entry certificate may be issued) must
be included in evaluating offers for Canadian end products.

**(iii)** The Assistant Administrator for Procurement has determined
that for procurements subject to the Trade Agreements Act, it would be
inconsistent with the public interest to apply the Buy American Act to
U.S.-made end products that are substantially transformed in the United
States.

**Subpart** **1825.4\--Trade Agreements**

**1825.400 Scope of subpart.**

\(b\) The Buy American Act applies to all acquisitions of Japanese end
products or services in excess of \$2,500.

**Subpart** **1825.9\--Customs and Duties**

**1825.901 Policy.**

NASA has statutory authority to exempt certain articles from import
duties, including articles that will be launched into space, spare parts
for such articles, ground support equipment, and unique equipment used
in connection with an international program or launch service agreement.
This authority is fully described in 14 CFR 1217.

**1825.903 Exempted supplies.**

\(a\) Through delegation from the Assistant Administrator for
Procurement, Procurement Officers are authorized to certify duty free
entry for articles imported into the United States, if those articles
are procured by NASA or by other U.S. Government agencies, or by U.S.
Government contractors or subcontractors when title to the articles is
or will be vested in the U.S. Government in accordance with the terms of
the contract or subcontract. Procurement officers shall complete the
certification set forth in 14 CFR 1217.104(a) or 1217.104(c)

(http://www.access.gpo.gov/nara/cfr/cfr-retrieve.html - page1). Upon
arrival of foreign supplies at a port of entry, the consignee, generally
the commercial carrier or its agent (import broker), will file Customs
Form 7501, Entry Summary. This form is available from Service Ports
(http://www.customs.ustreas.gov/location/ports/index.htm) or from NASA
Headquarters\' forms library
(https://extranet.hq.nasa.gov/nef/user/form_search.cfm). All duty-free
certificates must be coordinated with the center Chief Counsel.
Procurement officers must maintain a record of each certification and
make this record available for periodic review by NASA Headquarters and
the U.S. Customs Service.

**Subpart** **1825.10\--Additional Foreign Acquisition Regulations**

**1825.1001 Wavier of right to examination of records.**

\(b\) The Administrator is the approval authority for waivers. The
contracting officer must submit the waiver request, consisting of the
determination and findings prescribed in FAR 25.1001(b) and any relevant
supporting information, to the Headquarters Office of Procurement (Code
HS).

**1825.1002 Use of foreign currency.**

The NASA Headquarters Comptroller (Code B) is the designated official
for making the determination of the feasibility of using excess or
near-excess currency.

**Subpart** **1825.11\--Solicitation Provisions and Contract Clause**

**1825.1101 Acquisition of supplies.**

(c)(1) NASA has determined that the restrictions of the Buy American Act
are not applicable to U.S.-made end products.

\(e\) The contracting officer must add paragraph (k) as set forth in
1852.225-8, Duty-Free Entry of Space Articles, in solicitations and
contracts when the supplies that will be accorded duty-free entry are
identifiable before award. Insert the supplies determined in accordance
with FAR Subpart 25.9 and 1825.903.

**1825.1103 Other provisions and clauses.**

**1825.1103-70 Export control.**

\(a\) Background. (1) NASA contractors and subcontractors are subject to
U.S. export control laws and regulations, including the International
Traffic in Arms Regulations (ITAR), 22 CFR Parts 120 through 130, and
the Export Administration Regulations (EAR), 15 CFR Parts 730 through
799. The contractor is responsible for obtaining the appropriate
licenses or other approvals from the Department of State or the
Department of Commerce when it exports hardware, technical data, or
software, or provides technical assistance to a foreign destination or
\"foreign person\", as defined in 22 CFR 120.16, and there are no
applicable or available exemptions/exceptions to the ITAR/ EAR,
respectively. A person who is lawfully admitted for permanent residence
in the United States is not a \"foreign person\". (See 22 CFR 120.16 and
15 CFR 734.2(b)(2)(ii).)

\(2\) The exemption at 22 CFR 125.4(b)(3) of the ITAR provides that a
contractor may export technical data without a license if the contract
between the agency and the exporter provides for the export of the data.
The clause at 1852.225-70, Alternate I, provides contractual authority
for the exemption, but the exemption is available only after the
contracting officer, or designated representative, provides written
authorization or direction enabling its use. It is NASA policy that the
exemption at 22 CFR 125.4(b)(3) may only be used when technical data
(including software) is exchanged with a NASA foreign partner pursuant
to the terms of an international agreement in furtherance of an
international collaborative effort. The contracting officer must obtain
the approval of the Center Export Administrator before granting the
contractor the authority to use this

exemption.

\(b\) Contract clause*.* Insert the clause at 1852.225-70, Export
Licenses, in all solicitations and contracts, except in contracts with
foreign entities. Insert the clause with its Alternate I when the NASA
project office indicates that technical data (including software) is to
be exchanged by the contractor with a NASA foreign partner pursuant to
an international agreement.

**Subpart** **1825.70\--Foreign Contract and International Agreement
Clearances**

**1825.7000 Scope of subpart.**

This subpart prescribes policy and procedures for pre-award clearance of
foreign contracts, and for coordination of international agreements that
contemplate award of contracts using appropriated funds.

**1825.7001 Definition.**

**\"Foreign contract acquisition",** as used in this subpart, means the
acquisition by negotiation of supplies or services, including
construction work and research and development when the work is to be
performed outside the United States, its possessions, and Puerto Rico by
a foreign government or instrumentality thereof or by a foreign private
contractor. The term does not include \--

\(a\) Negotiation of contracts with domestic concerns involving work to
be performed outside the United States, its possessions, and Puerto
Rico; or

\(b\) Contracts with the Canadian Commercial Corporation.

**1825.7002 Foreign Contracts.**

\(a\) [Policy.]{.underline} Following the procedure in paragraph (b) of
this section, the Acquisition Team must coordinate with Headquarters
before initiating any foreign contract acquisition if the acquisition is
valued above \$100,000 or involves export control issues. An acquisition
involves export control issues if it entails \--

\(1\) Importing or exporting goods or technical data from or to a
country listed in 22 CFR 126.1(a) or (d) (Subchapter M, the
International Traffic in Arms Regulations)

(http://www.pmdtc.org/reference.htm#ITAR):

\(2\) Importing or exporting Defense Articles or Defense Services on the
United States Munitions List at 22 CFR Part 121 which would require NASA
to obtain a license from the State Department\'s Office of Defense Trade
Controls;

\(3\) Exporting goods or technical data on the Commerce Control List at
15 CFR Part 744 and that require NASA to obtain either a Special or an
Individual Validated License;

\(4\) Importing and/or exporting goods or technical data from or to an
entity listed in 15 CFR Part 740, Supplements 1, Country Group D; or

\(5\) Exporting and/or importing of goods, technology, or services to or
from any entity subject to transaction control, embargo, or sanctions
pursuant to 31 CFR Chapter V.

\(b\) [Procedure.]{.underline}

\(1\) The Headquarters or field installation technical office requiring
a foreign contract acquisition meeting any of the criteria listed in
paragraph (a) of this section must submit the

following information to the Headquarters Office of External Relations
(Code I) through the contracting officer and the Headquarters Office of
Procurement (Code HS) \--

\(i\) The name of the foreign entity, the country or countries involved,
and the purpose of the contract;

\(ii\) The Space Act agreement(s) involved (pursuant to NMI 1050.9), if
any;

\(iii\) A description of the goods or technical data requiring prior
written approval or the issuance of the license for their import or
export from the Departments of Commerce, State, or Treasury; and

\(iv\) The reason why the acquisition is being placed with a foreign
entity.

\(2\) All coordination required between NASA and the Departments of
Commerce, State, and Treasury regarding foreign contract acquisitions
shall be accomplished through the Headquarters Office of External
Relations (Code I).

\(3\) The lead-time for obtaining an export license is 60 to 90 days.
Requests for Headquarters clearance should be initiated as early as
possible.

**1825.7003 International Agreements.**

Office of Procurement (Code HS) concurrence is required for all
Memoranda of Understanding with foreign entities and for other types of
international agreements which contemplate the procurement of goods or
services using U.S. appropriated funds. No Code H concurrence is
required for agreements which are done solely on a cooperative basis.