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[Federal Register Volume 75, Number 249 (Wednesday, December 29, 2010)]
[Rules and Regulations]
[Pages 81915-81921]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32711]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 225 and 252

RIN 0750-AG80

Defense Federal Acquisition Regulation Supplement; Foreign 
Participation in Acquisitions in Support of Operations in Afghanistan 
(DFARS Case 2009-D012)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule to amend the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement--
     Waiver of section 302(a) of the Trade Agreements Act of 
1979, as amended, which prohibits acquisitions of products or services 
from nondesignated countries, in order to allow acquisition from the 
nine South Caucasus/Central and South Asian (SC/CASA) states; and
     Determination of inapplicability of the Balance of 
Payments Program evaluation factor to offers of products (other than 
arms, ammunition, or war materials) from the SC/CASA states to support 
operations in Afghanistan.

DATES: Effective Date: December 29, 2010.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition 
Regulations System, OUSD (AT&L) DPAP/DARS), Room 3B855, 3060 Defense 
Pentagon, Washington, DC 20301-3060. Telephone 703-602-0328; facsimile 
703-602-0350. Please cite DFARS Case 2009-D012.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule on January 6, 2010 (75 FR 832) to 
implement--
     A waiver of the procurement prohibition of section 302(a) 
of the Trade Agreements Act of 1979 with regard to acquisitions by DoD 
or GSA, on behalf of DoD, in support of operations in Afghanistan from 
the following nine South Caucasus/Central and South Asian (SC/CASA) 
states: Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, and Uzbekistan; and
     A determination by the Deputy Secretary of Defense that it 
would be inconsistent with the public interest to apply the provisions 
of the Balance of Payments Program to offers of products (other than 
arms, ammunition, or war materials) and construction materials from 
these SC/CASA states acquired in direct support of operations in 
Afghanistan.

In addition, the proposed rule made corrections to--
     Alternate I of 252.225-7035, to delete the phrase 
``Australian or'' from paragraph (c)(2)(i); and
     Alternate I of 252.225-7045, to add in paragraph (b), line 
4, that the Bahrain Free Trade Agreement does not apply.
    DoD did not receive any comments on the proposed rule.
    Therefore, DoD is finalizing the proposed rule with no substantive 
change. The final rule does incorporate the following editorial and 
technical corrections:
     Incorporates the current DFARS baseline.
     Amends various clause prefaces to reference the correct 
clause prescriptions.
     Amends 225.1101(6)(i) to reference the World Trade 
Organization (WTO) Government Procurement Agreement (GPA) rather than 
the Trade Agreements Act, in conformance with FAR 225.1101(c)(1).
     Amends paragraph (d), added by Alternate II to the clause 
at 252.225-

[[Page 81916]]

7021, to limit applicability. Only contractors from an SC/CASA state 
are required to notify the government of the SC/CASA state with regard 
to the benefit of providing reciprocal procurement opportunities to 
U.S. products and services, in conformance with the requirement imposed 
by the United States Trade Representative.
     Corrects the provision and clause at 252.225-7035 and 
252.225-7036, so that Peruvian end products are not erroneously treated 
as eligible products in acquisitions that do not exceed the WTO GPA 
threshold (see DFARS Case 2008-D046, published at 74 FR 37650 and 75 FR 
3179 for initial implementation of the Peruvian Free Trade Agreement). 
The threshold for end products for the Peruvian Free Trade Agreement, 
like the Free Trade Agreements of Bahrain and Morocco, is equal to the 
threshold of the WTO GPA. Therefore, these trade agreements are only in 
effect for acquisitions that exceed the WTO GPA threshold (covered by 
DFARS provision and clause 252.225-7020 and 252.225-7021). This is a 
technical amendment to this DFARS provision and clause in order to 
conform to the trade threshold for the Peruvian Free Trade Agreement 
that is at FAR 25.402(b) and to be consistent with the corresponding 
FAR provision and clause at 52.225-3 and 52.225-4.

II. Executive Order 12866

    This is not a significant regulatory action and, therefore, was not 
subject to review by the Office of Management and Budget under 
Executive Order 12866, dated September 30, 1993. This rule is not a 
major rule under 5 U.S.C. 804.

III. Regulatory Flexibility Act

    DoD certifies that this 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., because this 
rule only impacts acquisitions that are in support of operations in 
Afghanistan, allowing acquisition of products and services from the SC/
CASA states. The minimal information collection requirement applies 
only to contractors that are from an SC/CASA state, and does not apply 
to U.S. small business concerns. DoD did not receive any comments from 
small businesses or other interested parties.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act applies because the rule modifies 
information collection requirements that have been approved by the 
Office of Management and Budget under 44 U.S.C. 3501, et seq. However, 
the impact on existing approved information collection requirements 
(OMB clearance 0704-0229) is expected to be negligible.
    In addition, this final rule contains a new information collection 
requirement that has received approval of the Office of Management and 
Budget under 44 U.S.C. 3501, et seq. (OMB Clearance Number 0704-0475). 
DoD did not receive any comments on the proposed information collection 
requirement.

List of Subjects in 48 CFR Parts 225 and 252

    Government procurement.

Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR parts 225 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 225 and 252 continues to 
read as follows:

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

PART 225--FOREIGN ACQUISITION

0
2. Amend section 225.003 by adding paragraphs (14) through (16) to read 
as follows:

225.003  Definitions.

* * * * *
    (14) South Caucasus/Central and South Asian (SC/CASA) state means 
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    (15) South Caucasus/Central and South Asian (SC/CASA) state 
construction material means construction material that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of a construction material that consists in whole 
or in part of materials from another country, has been substantially 
transformed in an SC/CASA state into a new and different construction 
material distinct from the material from which it was transformed.
    (16) South Caucasus/Central and South Asian (SC/CASA) state end 
product means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
an SC/CASA state 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 refers to a product offered for 
purchase under a supply contract, but for purposes of calculating the 
value of the end product, includes services (except transportation 
services) incidental to its supply, provided that the value of those 
incidental services does not exceed the value of the product itself.

0
3. Section 225.401 is revised to read as follows:

225.401  Exceptions.

    (a)(2)(A) If a department or agency considers an individual 
acquisition of a product to be indispensable for national security or 
national defense purposes and appropriate for exclusion from the 
provisions of FAR subpart 25.4, it may submit a request with supporting 
rationale to the Director of Defense Procurement and Acquisition Policy 
(OUSD(AT&L)DPAP). Approval by OUSD(AT&L)DPAP is not required if--
    (1) Purchase from foreign sources is restricted by statute (see 
subpart 225.70);
    (2) Another exception in FAR 25.401 applies to the acquisition; or
    (3) Competition from foreign sources is restricted under subpart 
225.71.
    (B) Public interest exceptions for certain countries when acquiring 
products or services in support of operations in Afghanistan are in 
225.7704-1.

0
3. Amend section 225.403 by adding paragraph (c)(iii) to read as 
follows:

225.403  World Trade Organization Government Procurement Agreement and 
Free Trade Agreements.

    (c) * * *
    (iii) The acquisition is in support of operations in Afghanistan 
(see 225.7704-1).

0
4. Amend section 225.502 by adding paragraph (a) to read as follows:

225.502  Application.

    (a) Whenever the acquisition is in support of operations in 
Afghanistan, treat the offers of end products from South Caucasus or 
Central and South Asian states listed in 225.401-70 the same as 
qualifying country offers.
* * * * *

0
5. Revise section 225.1101 to read as follows:

225.1101  Acquisition of supplies.

    (1)(i) Use the provision at 252.225-7000, Buy American Act--Balance 
of Payments Program Certificate, instead of the provision at FAR 
52.225-2, Buy American Act Certificate. Use the provision in any 
solicitation that includes the clause at 252.225-7001,

[[Page 81917]]

Buy American Act and Balance of Payments Program.
    (ii) Use the provision with its Alternate I when the acquisition is 
of end products listed in 225.401-70 in support of operations in 
Afghanistan.
    (2)(i) Use the clause at 252.225-7001, Buy American Act and Balance 
of Payments Program, instead of the clause at FAR 52.225-1, Buy 
American Act--Supplies, in solicitations and contracts unless--
    (A) All line items will be acquired from a particular source or 
sources under the authority of FAR 6.302-3;
    (B) All line items must be domestic or qualifying country end 
products in accordance with Subpart 225.70. (However, the clause may 
still be required if Subpart 225.70 requires manufacture of the end 
product in the United States or in the United States or Canada, without 
a corresponding requirement for use of domestic components);
    (C) An exception to the Buy American Act or Balance of Payments 
Program applies (see FAR 25.103, 225.103, and 225.7501);
    (D) One or both of the following clauses will apply to all line 
items in the contract:
    (1) 252.225-7021, Trade Agreements.
    (2) 252.225-7036, Buy American Act--Free Trade Agreements--Balance 
of Payments Program; or
    (E) All line items will be acquired using a procedure specified in 
225.7703-1(a).
    (ii) Use the clause with its Alternate I when the acquisition is of 
end products listed in 225.401-70 in support of operations in 
Afghanistan.
    (3) Use the clause at 252.225-7002, Qualifying Country Sources as 
Subcontractors, in solicitations and contracts that include one of the 
following clauses:
    (i) 252.225-7001, Buy American Act and Balance of Payments Program.
    (ii) 252.225-7021, Trade Agreements.
    (iii) 252.225-7036, Buy American Act--Free Trade Agreements--
Balance of Payments Program.
    (4) Use the clause at 252.225-7013, Duty-Free Entry, instead of the 
clause at FAR 52.225-8. Do not use the clause for acquisitions of 
supplies that will not enter the customs territory of the United 
States.
    (5)(i) Except as provided in paragraph (7) of this section, use the 
provision at 252.225-7020, Trade Agreements Certificate, instead of the 
provision at FAR 52.225-6, Trade Agreements Certificate, in 
solicitations that include the clause at 252.225-7021, Trade 
Agreements.
    (ii) Use the provision with its Alternate I when the acquisition is 
of end products in support of operations in Afghanistan.
    (6)(i) Use the clause at 252.225-7021, Trade Agreements, instead of 
the clause at FAR 52.225-5, Trade Agreements, if the World Trade 
Organization Government Procurement Agreement applies.
    (ii) Use the clause with its Alternate I in solicitations and 
contracts that include the clause at 252.225-7024, Requirement for 
Products or Services from Iraq or Afghanistan, unless the clause at 
252.225-7024 has been modified to provide a preference only for the 
products of Afghanistan.
    (iii) Use the clause with its Alternate II when the acquisition is 
of end products in support of operations in Afghanistan and Alternate I 
is not applicable.
    (iv) Do not use the clause if--
    (A) Purchase from foreign sources is restricted, unless the 
contracting officer anticipates a waiver of the restriction; or
    (B) The clause at 252.225-7026, Acquisition Restricted to Products 
or Services from Iraq or Afghanistan, is included in the solicitation 
and contract.
    (v) The acquisition of eligible and noneligible products under the 
same contract may result in the application of trade agreements to only 
some of the items acquired. In such case, indicate in the Schedule 
those items covered by the Trade Agreements clause.
    (7) Use the provision at 252.225-7022, Trade Agreements 
Certificate--Inclusion of Iraqi End Products, instead of the provision 
at FAR 52.225-6, Trade Agreements Certificate, in solicitations that 
include the clause at 252.225-7021, Trade Agreements, with its 
Alternate I.
    (8) Use the provision at 252.225-7032, Waiver of United Kingdom 
Levies--Evaluation of Offers, in solicitations if a U.K. firm is 
expected to--
    (i) Submit an offer; or
    (ii) Receive a subcontract exceeding $1 million.
    (9) Use the clause at 252.225-7033, Waiver of United Kingdom 
Levies, in solicitations and contracts if a U.K. firm is expected to--
    (i) Submit an offer; or
    (ii) Receive a subcontract exceeding $1 million.
    (10)(i) Use the provision at 252.225-7035, Buy American Act--Free 
Trade Agreements--Balance of Payments Program Certificate, instead of 
the provision at FAR 52.225-4, Buy American Act--Free Trade 
Agreements--Israeli Trade Act Certificate, in solicitations that 
include the clause at 252.225-7036, Buy American Act--Free Trade 
Agreements--Balance of Payments Program.
    (ii) Use the provision with its Alternate I when the clause at 
252.225-7036 is used with its Alternate I.
    (iii) Use the provision with its alternate II when the clause at 
252.225-7036 is used with its Alternate II.
    (iv) Use the provision with its Alternate III when the clause at 
252.225-7036 is used with its Alternate III.
    (11)(i) Except as provided in paragraph (11)(ii) of this section, 
use the clause at 252.225-7036, Buy American Act--Free Trade 
Agreements--Balance of Payments Program, instead of the clause at FAR 
52.225-3, Buy American Act--Free Trade Agreements--Israeli Trade Act, 
in solicitations and contracts for the items listed at 225.401-70, when 
the estimated value equals or exceeds $25,000, but is less than 
$203,000, and a Free Trade Agreement applies to the acquisition.
    (A) Use the basic clause when the estimated value equals or exceeds 
$70,079, except if the acquisition is of end products in support of 
operations in Afghanistan, use with its Alternate II.
    (B) Use the clause with its Alternate I when the estimated value 
equals or exceeds $25,000 but is less than $70,079, except if the 
acquisition is of end products in support of operations in Afghanistan, 
use with its Alternate III.
    (ii) Do not use the clause if--
    (A) Purchase from foreign sources is restricted (see 
225.401(a)(2)), unless the contracting officer anticipates a waiver of 
the restriction;
    (B) Acquiring information technology that is a commercial item, 
using fiscal year 2004 or subsequent funds (Section 535 of Division F 
of the Consolidated Appropriations Act, 2004 (Pub. L. 108-199), and the 
same provision in subsequent appropriations acts); or
    (C) Using a procedure specified in 225.7703-1(a).
    (iii) The acquisition of eligible and noneligible products under 
the same contract may result in the application of a Free Trade 
Agreement to only some of the items acquired. In such case, indicate in 
the Schedule those items covered by the Buy American Act--Free Trade 
Agreements--Balance of Payments Program clause.

0
6. Amend section 225.7501 by:
0
a. Redesignating paragraph (b)(1)(iii) as (b)(1)(iv);
0
b. Adding new paragraph (b)(1)(iii); and
0
c. Revising paragraph (b)(2) to read as follows:

225.7501  Policy.

* * * * *

[[Page 81918]]

    (b) * * *
    (1) * * *
    (iii) If the acquisition is in support of operations in 
Afghanistan, a South Caucasus/Central and South Asian state end product 
listed in 225.401-70 (see 225.7704-2); or
* * * * *
    (2) The construction material is an eligible product or, if the 
acquisition is in support of operations in Afghanistan, the 
construction material is a South Caucasus/Central and South Asian state 
construction material (see 225.7704-2); or
* * * * *

0
7. Revise section 225.7503 to read as follows:

225.7503  Contract clauses.

    Unless the entire acquisition is exempt from the Balance of 
Payments Program--
    (a)(1) Use the clause at 252.225-7044, Balance of Payments 
Program--Construction Material, in solicitations and contracts for 
construction to be performed outside the United States with a value 
greater than the simplified acquisition threshold but less than 
$7,804,000.
    (2) Use the clause with its Alternate I if the acquisition is in 
support of operations in Afghanistan.
    (b)(1) Use the clause at 252.225-7045, Balance of Payments 
Program--Construction Material Under Trade Agreements, in solicitations 
and contracts for construction to be performed outside the United 
States with a value of $7,804,000 or more, except as provided in 
225.7503(b)(4).
    (2) For acquisitions with a value of $7,804,000 or more, but less 
than $9,110,318, use the clause with its Alternate I, unless the 
acquisition is in support of operations in Afghanistan, use the clause 
with its Alternate III.
    (3) If the acquisition is for construction with a value of more 
than $8,817,449 or more and is in support of operations in Afghanistan, 
use the clause with its Alternate II.
    (4) If the acquisition is for construction with a value of 
$7,443,000 or more, but less than $8,817,449, and is in support of 
operations in Afghanistan, use the clause with its Alternate III.

0
8. Revise section 225.7700 to read as follows:

225.7700  Scope.

    This subpart implements--
    (a) Section 886 and section 892 of the National Defense 
Authorization Act for Fiscal Year 2008 (Pub. L. 110-181); and
    (b) The determinations by the Deputy Secretary of Defense regarding 
participation of the countries of the South Caucasus or Central and 
South Asia in acquisitions in support of operations in Afghanistan.

0
9. Add sections 225.7704, 225.7704-1, 225.7704-2, and 225.7704-3 to 
read as follows:

225.7704  Acquisitions of products and services from South Caucasus/
Central and South Asian (SC/CASA) state in support of operations in 
Afghanistan.

225.7704-1  Applicability of trade agreements.

    As authorized by the United States Trade Representative, the 
Secretary of Defense has waived the prohibition in section 302(a) of 
the Trade Agreements Act (see subpart 225.4) for acquisitions by DoD, 
and by GSA on behalf of DoD, of products and services from SC/CASA 
states in direct support of operations in Afghanistan.

225.7704-2  Applicability of Balance of Payments Program.

    The Deputy Secretary of Defense has determined, because of 
importance to national security, that it would be inconsistent with the 
public interest to apply the provisions of the Balance of Payments 
Program (see subpart 225.75) to offers of end products other than arms, 
ammunition, and war materials (i.e., end products listed in 225.401-70) 
and construction materials from the SC/CASA states that are being 
acquired by or on behalf of DoD in direct support of operations in 
Afghanistan.

225.7704-3  Solicitation provisions and contract clauses.

    Appropriate solicitation provisions and contract clauses are 
prescribed as alternates to the Buy American-Trade Agreements-Balance 
of Payments Program solicitation provisions and contract clauses 
prescribed at 225.1101 and 225.7503.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. Amend section 252.212-7001 as follows:
0
a. Redesignate paragraph (b)(5) as paragraph (b)(5)(i);
0
b. Add paragraph (b)(5)(ii);
0
c. Amend the clause date in paragraph (11)(i) by removing ``(NOV 
2009)'' and adding in its place ``(DEC 2010)'';
0
d. Revise paragraph (11)(ii);
0
e. Amend the clause date in paragraph (14)(ii) by removing ``(JUL 
2009)'' and adding in its place ``(DEC 2010)''; and
0
f. Add paragraphs (14)(iii) and (iv) to read as follows:

252.212-7001  Contract Terms and Conditions Required to Implement 
Statutes or Executive Orders Applicable to Defense Acquisitions of 
Commercial Items.

* * * * *
    (b) * * *
    (5) * * *
    (ii) ---- Alternate I (DEC 2010) of 252.225-7001.
* * * * *
    (11) * * *
    (ii) ---- Alternate I (DEC 2010) of 252.225-7021.
* * * * *
    (14) * * *
    (iii) ---- Alternate II (DEC 2010) of 252.225-7036.
    (iv) ---- Alternate III (DEC 2010) of 252.225-7036.
* * * * *

0
11. Amend section 252.225-7000 by revising the introductory text and 
adding Alternate I at the end of the section to read as follows:

252.225-7000  Buy American Act--Balance of Payments Program 
Certificate.

    As prescribed in 225.1101(1)(i), use the following provision:
* * * * *

ALTERNATE I (DEC 2010)

    As prescribed in 225.1101(1)(ii), add the terms ``South 
Caucasus/Central and South Asian (SC/CASA) state'' and ``South 
Caucasus/Central and South Asian (SC/CASA) state end product'' in 
paragraph (a) and replace the phrase ``qualifying country end 
products'' in paragraphs (b)(2) and (c)(2) with the phrase 
``qualifying country end products or SC/CASA state end products.''

0
12. Amend section 252.225-7001 by revising the introductory text and 
adding ALTERNATE I to read as follows:

252.225-7001  Buy American Act and Balance of Payments Program.

    As prescribed in 225.1101(2)(i), use the following clause:
* * * * *

ALTERNATE I (DEC 2010)

    As prescribed in 225.1101(2)(ii), add the following definitions 
to paragraph (a) and substitute the following paragraphs (b) and (c) 
for paragraphs (b) and (c) of the basic clause:
    (a)(10) ``South Caucasus/Central and South Asian (SC/CASA) 
state'' means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, 
Pakistan, Tajikistan, Turkmenistan, or Uzbekistan.
    (11) ``South Caucasus/Central and South Asian (SC/CASA) state 
end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part 
of materials from another

[[Page 81919]]

country, has been substantially transformed in an SC/CASA state 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 refers to a product offered for purchase under 
a supply contract, but for purposes of calculating the value of the 
end product includes services (except transportation services) 
incidental to its supply, provided that the value of those 
incidental services does not exceed the value of the product itself.
    (b) This clause implements the Balance of Payments Program. 
Unless otherwise specified, this clause applies to all line items in 
the contract.
    (c) The Contractor shall deliver only domestic end products 
unless, in its offer, it specified delivery of other end products in 
the Buy American Act Balance of Payments Program Certificate 
provision of the solicitation. If the Contractor certified in its 
offer that it will deliver a qualifying country end product or an 
SC/CASA state end product, the Contractor shall deliver a qualifying 
country end product an SC/CASA state end product, or, at the 
Contractor's option, a domestic end product.

0
13. Amend section 252.225-7020 by revising the introductory text and 
adding Alternate I at the end of the section to read as follows:

252.225-7020  Trade Agreements Certificate.

    As prescribed in 225.1101(5)(i), use the following provision:
* * * * *

ALTERNATE I (DEC 2010)

    As prescribed in 225.1101(5)(ii), substitute the following 
paragraphs (a), (b)(2), and (c) for paragraph (a), (b)(2), and (c) 
of the basic clause:
    (a) Definitions. ``Designated country end product,'' 
``nondesignated country end product,'' ``qualifying country end 
product,'' ``South Caucasus/Central and South Asian (SC/CASA) 
state,'' ``South Caucasus/Central and South Asian (SC/CASA) state 
end product,'' and ``U.S.-made end product'' have the meanings given 
in the Trade Agreements clause of this solicitation.
    (b)(2) Will consider only offers of end products that are U.S.-
made, qualifying country, SC/CASA state, or designated country end 
products unless--
    (c) Certification and identification of country of origin.
    (1) For all line items subject to the Trade Agreement clause of 
this solicitation, the offeror certifies that each end product to be 
delivered under this contract, except those listed in paragraph 
(c)(2)(ii) of this provision, is a U.S.-made, qualifying country, 
SC/CASA state, or designated country end product.
    (2)(i) The following supplies are SC/CASA state end products:

(Line Item Number)-----------------------------------------------------
(Country of Origin)----------------------------------------------------

     (ii) The following are other nondesignated country end 
products:

(Line Item Number)-----------------------------------------------------
(Country of Origin)----------------------------------------------------

0
14. Amend section 252.225-7021 by revising the introductory text and 
adding Alternate II at the end of the section to read as follows:

252.225-7021  Trade Agreements.

    As prescribed in 225.1101(6)(i), use the following clause:
* * * * *

ALTERNATE II (DEC 2010)

    As prescribed in 225.1101(6)(iii), add the following new 
definitions to paragraph (a), substitute the following paragraph (c) 
for paragraph (c) of the basic clause, and add the following 
paragraph (d):
    (a)(14) ``South Caucasus/Central and South Asian (SC/CASA) 
state'' means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, 
Pakistan, Tajikistan, Turkmenistan, or Uzbekistan.
    (15) ``South Caucasus/Central and South Asian (SC/CASA) state 
end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in an SC/CASA state 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 refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its supply, 
provided that the value of those incidental services does not exceed 
the value of the product itself.
    (c) The Contractor shall deliver under this contract only U.S.-
made, qualifying country, SC/CASA state, or designated country end 
products unless--
    (1) In its offer, the Contractor specified delivery of other 
nondesignated country end products in the Trade Agreements 
Certificate provision of the solicitation; and
    (2)(i) Offers of U.S.-made, qualifying country, SC/CASA state, 
or designated country end products from responsive, responsible 
offerors are either not received or are insufficient to fill the 
Government's requirements; or
    (ii) A national interest waiver has been granted.
    (d) If the Contractor is from an SC/CASA state, the Contractor 
shall inform its government of its participation in this acquisition 
and that it generally will not have such opportunity in the future 
unless its government provides reciprocal procurement opportunities 
to U.S. products and services and suppliers of such products and 
services.

0
15. Amend section 252.225-7035 as follows:
0
a. Revise the introductory text;
0
b. Revise the clause date;
0
c. Revise paragraph (a);
0
d. Revise paragraph (b)(2);
0
e. Revise paragraph (c)(2)(ii);
0
f. Revise Alternate I; and
0
g. Add Alternates II and III at the end of the section to read as 
follows:

252.225-7035  Buy American Act--Free Trade Agreements--Balance of 
Payments Program Certificate.

    As prescribed in 225.1101(10)(i), use the following provision:

BUY AMERICAN ACT--FREE TRADE AGREEMENTS--BALANCE OF PAYMENTS PROGRAM 
CERTIFICATE (DEC 2010)

    (a) Definitions. Bahrainian end product, commercially available 
off-the-shelf (COTS) item, component, domestic end product, Free 
Trade Agreement country, Free Trade Agreement country end product, 
foreign end product, Moroccan end product, Peruvian end product, 
qualifying country end product, and United States, as used in this 
provision, have the meanings given in the Buy American Act--Free 
Trade Agreements--Balance of Payments Program clause of this 
solicitation.
    (b) * * *
    (2) For line items subject to Free Trade Agreements, will 
evaluate offers of qualifying country end products or Free Trade 
Agreement country end products other than Bahrainian end products or 
Moroccan end products, or Peruvian end products without regard to 
the restrictions of the Buy American Act or the Balance of Payments 
Program.
    (c) * * *
    (2) * * *
    (ii) The offeror certifies that the following supplies are Free 
Trade Agreement country end products other than Bahrainian end 
products, Moroccan end products, or Peruvian end products:
(Line Item Number)-----------------------------------------------------
(Country of Origin)----------------------------------------------------
* * * * *

ALTERNATE I (DEC 2010)

    As prescribed in 225.1101(10)(ii), substitute the phrase 
``Canadian end product'' for the phrases ``Bahrainian end product,'' 
``Free Trade Agreement country,'' ``Free Trade Agreement country end 
product,'' ``Moroccan end product, and ``Peruvian end products'' in 
paragraph (a) of the basic provision; and substitute the phrase 
``Canadian end products'' for the phrase ``Free Trade Agreement 
country end products other than Bahrainian end products or Moroccan 
end products'' in paragraphs (b)(2) and (c)(2)(ii) of the basic 
provision, and delete the phrase ``Australian or'' from paragraph 
(c)(2)(i) of the basic provision.

ALTERNATE II (DEC 2010)

    As prescribed in 225.1101(10)(iii), add the terms ``South 
Caucasus/Central and South Asian (SC/CASA) state'' and ``South 
Caucasus/Central and South Asian (SC/CASA) state end product'' in 
paragraph (a) and substitute the following paragraphs (b)(2) and 
(c)(2)(i) for paragraphs (b)(2) and (c)(2)(i) of the basic clause.
    (b)(2) For line items subject to Free Trade Agreements, will 
evaluate offers of qualifying

[[Page 81920]]

country end products, SC/CASA state end products, or Free Trade 
Agreement country end products other than Bahrainian end products, 
Moroccan end products, or Peruvian end products without regard to 
the restrictions of the Buy American Act or the Balance of Payments 
Program.
    (c)(2)(i) The offeror certifies that the following supplies are 
qualifying country (except Australian or Canadian) or SC/CASA state 
end products:
(Line Item Number)-----------------------------------------------------
(Country of Origin)----------------------------------------------------

    (End of provision)

ALTERNATE III (DEC 2010)

    As prescribed in 225.1101(10)(iv), substitute the following 
paragraphs (a), (b)(2), (c)(2)(i), and (c)(2)(ii) for paragraphs 
(a), (b)(2), (c)(2)(i), and (c)(2)(ii) of the basic clause:
    (a) Definitions. Canadian end product, commercially available 
off-the-shelf (COTS) item, domestic end product, foreign end 
product, qualifying country end product, South Caucasus/Central and 
South Asian (SC/CASA) state end product, and United States have the 
meanings given in the Buy American Act--Free Trade Agreements--
Balance of Payments Program clause of this solicitation.
    (b)(2) For line items subject to Free Trade Agreements, will 
evaluate offers of qualifying country end products, SC/CASA state 
end products, or Canadian end products without regard to the 
restrictions of the Buy American Act or the Balance of Payments 
Program.
    (c)(2)(i) The offeror certifies that the following supplies are 
qualifying country (except Canadian) or SC/CASA state end products:

(Line Item Number)-----------------------------------------------------
(Country of Origin)----------------------------------------------------

    (ii) The offeror certifies that the following supplies are 
Canadian end products:

(Line Item Number)-----------------------------------------------------
(Country of Origin)----------------------------------------------------

0
16. Amend section 252.225-7036 as follows:
0
a. Revise the introductory text;
0
b. Revise the clause date;
0
c. Redesignate paragraph (a)(10) as paragraph (a)(11);
0
d. Add new paragraph (a)(10);
0
e. Redesignate paragraphs (a)(11) through (a)(13) as paragraphs (a)(12) 
through (a)(14); and
0
f. Add Alternates II and III at the end of the section to read as 
follows:

252.225-7036  Buy American Act--Free Trade Agreements--Balance of 
Payments Program.

    As prescribed in 225.1101(11)(i)(A), use the following clause:

BUY AMERICAN ACT--FREE TRADE AGREEMENTS--BALANCE OF PAYMENTS PROGRAM 
(DEC 2010)

    (a) * * *
    (10) Peruvian end product means an article that--
    (i) Is wholly the growth, product, or manufacture of Peru; or
    (ii) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in Peru 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 refers to a product 
offered for purchase under a supply contract, but for purposes of 
calculating the value of the end product includes services (except 
transportation services) incidental to its supply, provided that the 
value of those incidental services does not exceed the value of the 
product itself.
    (11) Qualifying country means any country set forth in the 
definition of ``qualifying country'' in Defense FAR Supplement 
225.003.
* * * * *

ALTERNATE II (DEC 2010)

    As prescribed in 225.1101(11)(i)(A), add the following new 
definitions to paragraph (a) and substitute the following paragraph 
(c) for paragraph (c) of the basic clause:
    (a)(14) South Caucasus/Central and South Asian (SC/CASA) state 
means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, 
Pakistan, Tajikistan, Turkmenistan, or Uzbekistan.
    (15) South Caucasus/Central and South Asian (SC/CASA) state end 
product means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in an SC/CASA state 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 refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its supply, 
provided that the value of those incidental services does not exceed 
the value of the product itself.
    (c) The Contractor shall deliver under this contract only 
domestic end products unless, in its offer, it specified delivery of 
qualifying country end products, SC/CASA state end products, Free 
Trade Agreement country end products other than Bahrainian end 
products, Moroccan end products, or Peruvian end products, or other 
foreign end products in the Buy American Act--Free Trade 
Agreements--Balance of Payments Program Certificate provision of the 
solicitation. If the Contractor certified in its offer that it will 
deliver a qualifying country end product, SC/CASA state end 
products, or a Free Trade Agreement country end product other than a 
Bahrainian end product, a Moroccan end product, or a Peruvian end 
product, the Contractor shall deliver a qualifying country end 
product, an SC/CASA state end product, a Free Trade Agreement 
country end product other than a Bahrainian end product, a Moroccan 
end product, or a Peruvian end product or, at the Contractor's 
option, a domestic end product.

ALTERNATE III (DEC 2010)

    As prescribed in 225.1101(11)(i)(B), add the following 
definitions to paragraph (a) and substitute the following paragraph 
(c) for paragraph (c) of the basic clause,
    (a)(14) Canadian end product, means an article that--
    (i) Is wholly the growth, product, or manufacture of Canada; or
    (ii) In the case of an article that consists in whole or in part 
of materials from another country, 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 refers to a product 
offered for purchase under a supply contract, but for purposes of 
calculating the value of the end product includes services (except 
transportation services) incidental to its supply, provided that the 
value of those incidental services does not exceed the value of the 
product itself.
    (15) South Caucasus/Central and South Asian (SC/CASA) state 
means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, 
Pakistan, Tajikistan, Turkmenistan, or Uzbekistan.
    (16) South Caucasus/Central and South Asian (SC/CASA) state end 
product means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in an SC/CASA state 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 refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its supply, 
provided that the value of those incidental services does not exceed 
the value of the product itself.
    (c) The Contractor shall deliver under this contract only 
domestic end products unless, in its offer, it specified delivery of 
qualifying country end products, SC/CASA state end products, 
Canadian end products, or other foreign end products in the Buy 
American Act--Free Trade Agreements--Balance of Payments Program 
Certificate provision of the solicitation. If the Contractor 
certified in its offer that it will deliver a qualifying country end 
product, SC/CASA state end products, or a Canadian end product, the 
Contractor shall deliver a qualifying country end product, an SC/
CASA state end product, a Canadian end product or, at the 
Contractor's option, a domestic end product.

0
17. Amend section 252.225-7044 by revising the introductory text; 
revising the clause date and adding Alternate I at the end of the 
section to read as follows:

[[Page 81921]]

252.225-7044  Balance of Payments Program--Construction Material.

    As prescribed in 225.7503(a)(1), use the following clause:
* * * * *

ALTERNATE I (DEC 2010)

    As prescribed in 225.7503(a)(2), add the following definitions 
to paragraph (a) and replace the phrase ``domestic construction 
material'' in the second sentence of paragraph (b) with the phrase 
``domestic construction material or SC/CASA state construction 
material.''
    ``South Caucasus/Central and South Asian (SC/CASA) state'' means 
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    ``SC/CASA state construction material'' means construction 
material that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of a construction material that consists in 
whole or in part of materials from another country, has been 
substantially transformed in an SC/CASA state into a new and 
different construction material distinct from the material from 
which it was transformed.

0
18. Amend section 252.225-7045 by revising the introductory text; 
revising Alternate I; and adding Alternate II and Alternate III at the 
end of the section to read as follows:

252.225-7045  Balance of Payments Program--Construction Material Under 
Trade Agreements.

    As prescribed in 225.7503(b)(1), use the following clause:
* * * * *

ALTERNATE I (DEC 2010)

    As prescribed in 225.7503(b)(2), add the following definition of 
``Bahrainian or Mexican construction material'' to paragraph (a) of 
the basic clause, and substitute the following paragraphs (b) and 
(c) for paragraphs (b) and (c) of the basic clause:
    Bahrainian or Mexican construction material means a construction 
material that--
    (1) Is wholly the growth, product, or manufacture of Bahrain or 
Mexico; or
    (2) In the case of a construction material that consists in 
whole or in part of materials from another country, has been 
substantially transformed in Bahrain or Mexico into a new and 
different construction material distinct from the materials from 
which it was transformed.
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In 
addition, the Contracting Officer has determined that the WTO GPA 
and all Free Trade Agreements except NAFTA and the Bahrain Free 
Trade Agreement apply to this acquisition. Therefore, the Balance of 
Payments Program restrictions are waived for designated country 
construction material other than Bahrainian or Mexican construction 
material.
    (c) The Contractor shall use only domestic or designated country 
construction material other than Bahrainian or Mexican construction 
material in performing this contract, except for--
    (1) Construction material valued at or below the simplified 
acquisition threshold in part 2 of the Federal Acquisition 
Regulation; or
    (2) Information technology that is a commercial item; or
    (3) The construction material or components listed by the 
Government as follows:

-----------------------------------------------------------------------
[Contracting Officer to list applicable excepted materials or 
indicate ``none''].

ALTERNATE II (DEC 2010)

    As prescribed in 225.7503(b)(3), add the following definitions 
to paragraph (a); substitute the following paragraph (b) and the 
introductory text of paragraph (c) for paragraph (b) and the 
introductory text of paragraph (c) of the basic clause; and add the 
following paragraph (d):
    South Caucasus/Central and South Asian (SC/CASA) state means 
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    SC/CASA state construction material means construction material 
that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of a construction material that consists in 
whole or in part of materials from another country, has been 
substantially transformed in an SC/CASA state into a new and 
different construction material distinct from the material from 
which it was transformed.
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In 
addition, the Contracting Officer has determined that the WTO GPA, 
Free Trade Agreements, and other waivers relating to acquisitions in 
support of operations in Afghanistan apply to this acquisition. 
Therefore, the Balance of Payments Program restrictions are waived 
for SC/CASA state and designated country construction materials.
    (c) The Contractor shall use only domestic, SC/CASA state, or 
designated country construction material in performing this 
contract, except for--
    (d) The Contractor shall inform its government of its 
participation in this acquisition and that it generally will not 
have such opportunity in the future unless its government provides 
reciprocal procurement opportunities to U.S. products and services 
and suppliers of such products and services.

ALTERNATE III (DEC 2010)

    As prescribed in 225.7503(b)(4), add the following definitions 
to paragraph (a); substitute the following paragraph (b) and the 
introductory text of paragraph (c) for paragraph (b) and the 
introductory text of paragraph (c) of the basic clause; and add the 
following paragraph (d):
    South Caucasus/Central and South Asian (SC/CASA) state means 
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    SC/CASA state construction material means construction material 
that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of a construction material that consists in 
whole or in part of materials from another country, has been 
substantially transformed in an SC/CASA state into a new and 
different construction material distinct from the material from 
which it was transformed.
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In 
addition, the Contracting Officer has determined that the WTO GPA, 
all Free Trade Agreements except NAFTA and the Bahrain Free Trade 
Agreement, and other waivers relating to acquisitions in support of 
operations in Afghanistan apply to this acquisition. Therefore, the 
Balance of Payments Program restrictions are waived for SC/CASA 
state and designated country construction material other than 
Bahrainian or Mexican construction material.
    (c) The Contractor shall use only domestic, SC/CASA state, or 
designated country construction material other than Bahrainian or 
Mexican construction material in performing this contract, except 
for--
    (d) The Contractor shall inform its Government of its 
participation in this acquisition and that it generally will not 
have such opportunity in the future unless its Government provides 
reciprocal procurement opportunities to U.S. products and services 
and suppliers of such products and services.

[FR Doc. 2010-32711 Filed 12-28-10; 8:45 am]
BILLING CODE 5001-08-N
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