57378 Federal Register / Vol. 71, No. 188 / Thursday, September 28, 2006 / Rules and Regulations 

using solicitation provision 52.225–18, 

Place of Manufacture (and its 

commercial item equivalent in 52.212–

3, Offeror Representations and 

Certifications–Commercial Items). For 

purposes of this report, the criteria 

established in the law is only whether 

the place of manufacture of an end 

product is in the United States or 

outside the United States, without 

regard to the origin of the components 

(see 25.001(c)). 

■ 4. Amend section 25.1101 by adding 

paragraph (f) to read as follows: 

25.1101 Acquisition of supplies. 

* * * * * 

(f) Insert the provision at 52.225–18, 

Place of Manufacture, in solicitations 

that are predominantly for the 

acquisition of manufactured end 

products, as defined in the provision at 

52.225–18 (i.e., the estimated value of 

the manufactured end products exceeds 

the estimated value of other items to be 

acquired as a result of the solicitation). 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 5. Amend section 52.212–3 by—

■ a. Revising the date of the provision; 

■ b. Amending the introductory 

paragraph of the provision by removing 

from the first sentence ‘‘paragraph (j)’’

and adding ‘‘paragraph (k)’’ in its place; 

and by removing from the second 

sentence ‘‘paragraphs (b) through (i)’’

and adding ‘‘paragraphs (b) through (j)’’

in its place; 

■ c. Amending paragraph (a) by 

removing from the end of the 

introductory paragraph the colon and 

adding an em dash in its place; and by 

adding in alphabetical order, the 

definitions ‘‘Manufactured end 

product’’ and ‘‘Place of manufacture’’; 

■ d. Redesignating paragraph ‘‘j’’ as 

paragraph ‘‘k’’; and adding new 

paragraph ‘‘j’’; 

■ e. In the newly designated paragraph 

(k)(1), removing ‘‘paragraph (j)’’ and 

adding ‘‘paragraph (k)(2)’’ in its place; 

and 

■ f. In the newly designated paragraph 

(k)(2), in the bracketed paragraph, 

removing ‘‘(b) through (i)’’ and adding 

‘‘(b) through (j)’’ in its place. 

The revised text reads as follows: 

52.212–3 Offeror Representations and 

Certifications—Commercial Items. 

* * * * * 

OFFEROR REPRESENTATIONS AND 

CERTIFICATIONS–COMMERCIAL ITEMS 

(SEP 2006) 

* * * * * 

(a) * * * 

Manufactured end product means any 

end product in Federal Supply Classes 

(FSC) 1000–9999, except—

(1) FSC 5510, Lumber and Related 

Basic Wood Materials; 

(2) Federal Supply Group (FSG) 87, 

Agricultural Supplies; 

(3) FSG 88, Live Animals; 

(4) FSG 89, Food and Related 

Consumables; 

(5) FSC 9410, Crude Grades of Plant 

Materials; 

(6) FSC 9430, Miscellaneous Crude 

Animal Products, Inedible; 

(7) FSC 9440, Miscellaneous Crude 

Agricultural and Forestry Products; 

(8) FSC 9610, Ores; 

(9) FSC 9620, Minerals, Natural and 

Synthetic; and 

(10) FSC 9630, Additive Metal 

Materials. 

Place of manufacture means the place 

where an end product is assembled out 

of components, or otherwise made or 

processed from raw materials into the 

finished product that is to be provided 

to the Government. If a product is 

disassembled and reassembled, the 

place of reassembly is not the place of 

manufacture. 

* * * * * 

(j) Place of manufacture. (Does not 

apply unless the solicitation is 

predominantly for the acquisition of 

manufactured end products.) For 

statistical purposes only, the offeror 

shall indicate whether the place of 

manufacture of the end products it 

expects to provide in response to this 

solicitation is predominantly—

(1) b In the United States (Check this 

box if the total anticipated price of 

offered end products manufactured in 

the United States exceeds the total 

anticipated price of offered end 

products manufactured outside the 

United States); or 

(2) b Outside the United States. 

* * * * * 

(End of provision) 

■ 6. Add section 52.225–18 to read as 

follows: 

52.225–18 Place of Manufacture. 

■ As prescribed in 25.1101(f), insert the 

following solicitation provision: 

PLACE OF MANUFACTURE (SEP 2006) 

(a) Definitions. As used in this 

clause—

Manufactured end product means any 

end product in Federal Supply Classes 

(FSC) 1000–9999, except—

(1) FSC 5510, Lumber and Related 

Basic Wood Materials; 

(2) Federal Supply Group (FSG) 87, 

Agricultural Supplies; 

(3) FSG 88, Live Animals; 

(4) FSG 89, Food and Related 

Consumables; 

(5) FSC 9410, Crude Grades of Plant 

Materials; 

(6) FSC 9430, Miscellaneous Crude 

Animal Products, Inedible; 

(7) FSC 9440, Miscellaneous Crude 

Agricultural and Forestry Products; 

(8) FSC 9610, Ores; 

(9) FSC 9620, Minerals, Natural and 

Synthetic; and 

(10) FSC 9630, Additive Metal 

Materials. 

Place of manufacture means the place 

where an end product is assembled out 

of components, or otherwise made or 

processed from raw materials into the 

finished product that is to be provided 

to the Government. If a product is 

disassembled and reassembled, the 

place of reassembly is not the place of 

manufacture. 

(b) For statistical purposes only, the 

offeror shall indicate whether the place 

of manufacture of the end products it 

expects to provide in response to this 

solicitation is predominantly—

(1) b In the United States (Check this 

box if the total anticipated price of 

offered end products manufactured in 

the United States exceeds the total 

anticipated price of offered end 

products manufactured outside the 

United States); or 

(2) b Outside the United States. 

(End of provision) 

[FR Doc. 06–8208 Filed 9–27–06; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Part 25 

[FAC 2005–13; FAR Case 2005–022; Item 

VII;Docket 2006–0020, Sequence 14] 

RIN 9000–AK34 

Federal Acquisition Regulation; FAR 

Case 2005–022, Exception to the Buy 

American Act for Commercial 

Information Technology 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed to convert to a 

final rule without change, an interim 

rule amending the Federal Acquisition 


jlentini on PROD1PC65 with RULES2
Federal Register / Vol. 71, No. 188 / Thursday, September 28, 2006 / Rules and Regulations 57379 

Regulation (FAR) to implement Section 

535(a) of Division F of the Consolidated 

Appropriations Act, 2004, and similar 

sections in subsequent appropriations 

acts. Section 535(a) authorizes an 

exception to the Buy American Act for 

acquisitions of information technology 

that are commercial items. 

DATES: Effective Date: September 28, 

2006. 

FOR FURTHER INFORMATION CONTACT For 

clarification of content, contact Mr. 

Jeremy Olson, at (202) 501–3221. Please 

cite FAC 2005–13, FAR case 2005–022. 

For information pertaining to status or 

publication schedules, contact the FAR 

Secretariat at (202) 501–4755. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule amends the Federal 

Acquisition Regulation to implement 

annual appropriations act provisions 

that exempt acquisitions of information 

technology that are commercial items 

from the Buy American Act, including—

• Section 535(a) of Division F, 

Consolidated Appropriations Act, 2004 

(Pub. L. 108–199); 

• Section 517 of Division H, Title V 

of the Consolidated Appropriations Act, 

2005 (Pub. L. 108–447); and 

• Section 717 of Division A, 

Transportation, Treasury, Housing and 

Urban Development, the Judiciary, the 

District of Columbia, and Independent 

Agencies Appropriations Act, 2006 

(Pub. L. 109–115). 

This exception was initially 

implemented through deviations by the 

individual agencies, until it became 

clear that it was not just for one year. 

The Councils now expect this exception 

to continue to appear in future 

appropriations acts. If the exception 

does not appear in a future 

appropriations act, the Councils will 

promptly change the FAR to limit 

applicability of the exception to the 

fiscal years to which it applies. DoD, 

GSA, and NASA published an interim 

rule in the Federal Register at 71 FR 

223, January 3, 2006 and the public 

comment period closed on March 6, 

2006. 

Public comments. The Councils 

addressed the two public comments as 

follows: 

Agree with rule 

One respondent concurs with the rule 

as written. The respondent views this 

rule as a positive first step in 

recognizing the Government’s need for 

quicker, cheaper access to commercialoff-the-shelf information technology. 

Response: None required. 

Rule should not apply to DoD 

The other respondent believes that the 

exception should not apply to DoD due 

to the security risk associated with 

foreign entities potentially gaining 

access to DoD information systems. 

Response: This rule implements 

statute. The statutes that the Councils 

are implementing do not exempt DoD. 

Each fiscal year statute states that the 

restrictions of the Buy American Act 

shall not apply to the acquisition by the 

Federal Government of information 

technology that is a commercial item. 

Although DoD uses DoD-unique Buy 

American Act/Free Trade Agreement 

provisions and clauses, this exception 

has already been implemented by DoD 

for Fiscal Years 2004 through 2006 by 

class deviations signed by the Director 

of Defense Procurement and Acquisition 

Policy (2004–O0003, 2005–O0004, 

2005–O0010). 

Regardless of the applicability of the 

Buy American Act, Defense FAR 

Supplement (DFARS) Subpart 239.71, 

Security and Privacy for Computer 

Systems, requires defense agencies to 

ensure that information assurance is 

provided for information technology in 

accordance with current policies, 

procedures, and statutes. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601, et seq., applies to this final 

rule. The Councils prepared a Final 

Regulatory Flexibility Analysis (FRFA), 

and it is summarized as follows: 

The objective of this rule is to promote 

Government access to commercial 

information technology. As a result of this 

exception, the Buy American Act will no 

longer apply to acquisitions of commercial 

information technology. The Free Trade 

Agreement non-discriminatory provisions are 

no longer necessary, since all products will 

be treated without the restrictions of the Buy 

American Act. The final rule applies to all 

offerors responding to solicitations for 

commercial information technology where 

the Buy American Act previously applied 

(generally, acquisitions between the micropurchase threshold and $193,000). This 

impact analysis does not include the 

Department of Defense, which applies this 

exception to DoD-unique Buy American Act/ 

Free Trade Agreement provisions and clauses 

under a separate case (DFARS Case 2005–

D011). This exception will allow small 

entities to compete without meeting the Buy 

American Act domestic end product 

requirements. 

It is anticipated that small business 

concerns will continue to receive the same 

number of awards in the range of the micropurchase threshold to $100,000, because 

these awards are generally set-aside for small 

business concerns. It is also expected that 

small business concerns will continue to 

receive awards in the range of $100,000 to 

$193,000, but in this range they will face 

competition from foreign end products. 

This rule will not have an effect on small 

businesses affected by the ‘‘non-manufacturer 

rule,’’ which means that a contractor under 

a small business set-aside or 8(a) contract 

shall be a small business under the 

applicable size standard and shall provide 

either its own product or that of another 

domestic small business manufacturing or 

processing concern. If there is a small 

business set-aside, and there is no SBA 

waiver of the nonmanufacturer rule, then 

FAR 52.219–6(c) and/or FAR 52.219–18(d) 

require that a domestic product must be 

furnished. In this case, the rule will have no 

effect on small businesses because the 

nonmanufacturer rule is not changed. If SBA 

did waive the nonmanufacturer rule, then 

there is no requirement to purchase a 

domestic product but an evaluation 

preference would apply. The rule could have 

an impact on small businesses when there is 

no small business set-aside because small 

businesses may lose the evaluation 

preference for acquisitions between $25,000 

and $193,000. 

Interested parties may obtain a copy 

of the FRFA from the FAR Secretariat. 

The FAR Secretariat has submitted a 

copy of the FRFA to the Chief Counsel 

for Advocacy of the Small Business 

Administration. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

apply because the changes to the FAR 

will slightly reduce the information 

collection requirements currently 

approved by the Office of Management 

and Budget OMB Clearances 9000–0024 

and 9000–0130. We estimate a reduction 

of approximately 300 hours to OMB 

Clearance 9000–0024 and 50 hours to 

9000–0130. 

List of Subjects in 48 CFR Part 25 

Government procurement. 

Dated: September 19, 2006. 

Ralph De Stefano, 

Director, Contract Policy Division. 

Interim Rule Adopted as Final Without 

Change 

■ Accordingly, the interim rule 

amending 48 CFR part 25, which was 

published in the Federal Register at 71 

FR 223, January 3, 2006, is adopted as 

a final rule without change. 

[FR Doc. 06–8217 Filed 9–27–06; 8:45 am] 

BILLING CODE 6820–EP–S 


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