[Federal Register Volume 69, Number 240 (Wednesday, December 15, 2004)]
[Rules and Regulations]
[Pages 74991-74992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27345]


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DEPARTMENT OF DEFENSE

48 CFR Parts 212, 213, 225, and 252

[DFARS Case 2003-D088]


Defense Federal Acquisition Regulation Supplement; Free Trade 
Agreements--Chile and Singapore

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, with changes, an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement new Free Trade Agreements with Chile and Singapore, as 
approved by Congress in the United States-Chile Free Trade Agreement 
Implementation Act and the United States-Singapore Free Trade Agreement 
Implementation Act. The new Free Trade Agreements waive the 
applicability of the Buy American Act for some foreign supplies and 
construction materials from Chile and Singapore, and specify 
procurement procedures designed to ensure fairness.

EFFECTIVE DATE: December 15, 2004.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition 
Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062; telephone (703) 602-0328; 
facsimile (703) 602-0350. Please cite DFARS Case 2003-D088.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD published an interim DFARS rule at 69 FR 1926 on January 13, 
2004, to implement new Free Trade Agreements with Chile and Singapore, 
in accordance with the United States-Chile Free Trade Agreement 
Implementation Act (Public Law 108-77) and the United States-Singapore 
Free Trade Agreement Implementation Act (Public Law 108-78). Applicable 
changes to the Federal Acquisition Regulation (FAR) were published in 
Federal Acquisition Circular (FAC) 2001-19 on January 7, 2004 (69 FR 
1051; Interim rule), and in FAC 2001-25 on October 5, 2004 (69 FR 
59700; Final rule).

[[Page 74992]]

    DoD received no comments on the interim DFARS rule. However, the 
final rule includes the following additional changes:
    <bullet> Amendment of the trade agreements clauses at DFARS 
252.225-7021, 252.225-7036, and 252.225-7045 to remove the statement 
that United States law will apply to resolve any claim of breach of 
contract. This statement is no longer necessary, because the final rule 
published in FAC 2001-25 contains a new FAR clause, 52.233-4, 
Applicable Law for Breach of Contract Claim, that is prescribed for 
inclusion in all contracts.
    <bullet> A minor amendment at DFARS 225.502(c)(i)(B) to clarify 
that, in acquisitions subject to a Free Trade Agreement, only eligible 
products of the applicable Free Trade Agreement country are exempt from 
application of the Buy American Act or Balance of Payments Program 
evaluation factor (e.g., for acquisitions between $25,000 and $58,550, 
a Mexican end product would be a ``NAFTA country end product'' but 
would not be an ``eligible product,'' in accordance with the thresholds 
at FAR 25.402).
    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. 
Although the rule opens up Government procurement to the products of 
Chile, and lowers the trade agreements threshold for the products of 
Singapore, the economic impact on U.S. small businesses will not be 
significant. DoD applies the trade agreements to only those non-defense 
items listed at DFARS 225.401-70, and acquisitions below $100,000 that 
are set aside for small businesses are exempt.

C. Paperwork Reduction Act

    This rule affects the certification and information collection 
requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, 
currently approved by the Office of Management and Budget under 
Clearance Number 0704-0229. The impact, however, is negligible. In the 
provision at DFARS 252.225-7020, Trade Agreements Certificate, the 
offeror no longer has to list offers of end products from Chile as 
nondesignated country end products. However, offers of Chilean end 
products would have been unlikely, because purchase of foreign products 
other than eligible products is prohibited by the Trade Agreements Act. 
In the provision at DFARS 252.225-7035, Buy American Act--Free Trade 
Agreements--Balance of Payments Program Certificate, the offeror must 
list all end products that are not domestic end products. The offeror 
will list products of Chile and Singapore on the list of Free Trade 
Agreement country end products, rather than the list of ``other foreign 
end products.''

List of Subjects in 48 CFR Parts 212, 213, 225, and 252

    Government procurement.

Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.


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Accordingly, the interim rule amending 48 CFR parts 212, 213, 225, and 
252, which was published at 69 FR 1926 on January 13, 2004, is adopted 
as a final rule with the following changes:
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1. The authority citation for 48 CFR parts 212, 213, 225, and 252 
continues to read as follows:

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

PART 225--FOREIGN ACQUISITION


225.502  [Amended]

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2. Section 225.502 is amended in paragraph (c)(i)(B) by removing 
``end'' and adding in its place ``eligible''.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.212-7001   [Amended]

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3. Section 252.212-7001 is amended as follows:
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a. By revising the clause date to read ``(DEC 2004)'';
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b. In paragraph (b), in entry ``252.225-7021'', by removing ``(JUN 
2004)'' and adding in its place ``(DEC 2004)''; and
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c. In paragraph (b), in entry ``252.225-7036'', by removing ``(JAN 
2004)'' the first place it appears and adding in its place ``(DEC 
2004)''.


252.225-7021  [Amended]

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4. Section 252.225-7021 is amended as follows:
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a. By revising the clause date to read ``(DEC 2004)'';
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b. By removing paragraph (e); and
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c. By redesignating paragraph (f) as paragraph (e).


252.225-7036  [Amended]

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5. Section 252.225-7036 is amended as follows:
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a. By revising the clause date to read ``(DEC 2004)''; and
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b. By removing paragraph (e).


252.225-7045  [Amended]

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6. Section 252.225-7045 is amended as follows:
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a. By revising the clause date to read ``(DEC 2004)''; and
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b. By removing paragraph (d).

[FR Doc. 04-27345 Filed 12-14-04; 8:45 am]
BILLING CODE 5001-08-P