[Federal Register Volume 71, Number 225 (Wednesday, November 22, 2006)]
[Rules and Regulations]
[Pages 67776-67778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9306]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2005-14; FAR Case 2006-017; Item III; Docket 2006-0020, Sequence 
11]
RIN 9000-AK61


Federal Acquisition Regulation; FAR Case 2006-017, Free Trade 
Agreements--Bahrain and Guatemala

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement the 
Dominican Republic--Central America--United States Free Trade Agreement 
with respect to Guatemala and the United States--Bahrain Free Trade 
Agreement.

DATES: Effective Date: November 22, 2006.
    Comment Date: Interested parties should submit written comments to 
the FAR Secretariat on or before January 22, 2007.

ADDRESSES: Submit comments identified by FAC 2005-14, FAR case 2006-
017, by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Search for any document by first selecting the proper document types 
and selecting ``Federal Acquisition Regulation'' as the agency of 
choice. At the ``Keyword'' prompt, type in the FAR case number (for 
example, FAR Case 2006-001) and click on the ``Submit'' button. You may 
also search for any document by clicking on the ``Advanced search/
document search'' tab at the top of the screen, selecting from the 
agency field ``Federal Acquisition Regulation'', and typing the FAR 
case number in the keyword field. Select the ``Submit'' button.
    <bullet> Fax: 202-501-4067.
    <bullet> Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-14, FAR 
case 2006-017, in all correspondence related to this case. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential information 
provided.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Jeritta Parnell, Procurement Analyst, at (202) 501-4082. Please 
cite FAC 2005-14, FAR case 2006-017. For information pertaining to 
status or publication schedules, contact the FAR Secretariat at (202) 
501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule amends FAR Part 25 and the corresponding clauses in Part 
52 to implement the Dominican Republic--Central America--United States 
Free Trade Agreement (CAFTA-DR) with respect to Guatemala and the 
United States--Bahrain Free Trade Agreement (FTA). Congress approved 
these trade agreements in the Dominican Republic--Central America--
United States Free Trade Agreement Implementation Act (Public Law 109-
53) and the United States--Bahrain Free Trade Agreement Implementation 
Act (Pub. L. 109-169), respectively. These trade agreements waive the 
applicability of the Buy American Act for some foreign supplies and 
construction materials from Guatemala and Bahrain and specify 
procurement procedures designed to ensure fairness in the acquisition 
of supplies and services.
    This interim rule adds Bahrain and Guatemala to the definition of 
``Free Trade Agreement country.'' The rule also deletes Guatemala from 
the definition of ``Caribbean Basin country'' because, in accordance 
with Section 201(a)(3) of Pub. L. 109-53, when the CAFTA-DR agreement 
enters into force with respect to a country, that country is no longer 
designated as a beneficiary country for purposes of the Caribbean Basin 
Economic Recovery Act.
    The excluded services for the Bahrain FTA are the same as for the 
CAFTA-DR, Chile FTA, and NAFTA. Guatemala has the same thresholds as 
the other CAFTA-DR countries. The Bahrain FTA threshold for supply and 
service contracts is $193,000. For construction contracts, the Bahrain 
FTA threshold is $8,422,165.
    Like the Morocco FTA, the Bahrain FTA threshold for supplies and 
services is higher than the thresholds for the other FTAs. Therefore, 
Bahrainian end products are not covered by the Buy American Act--Free 
Trade Agreements--Israeli Trade Act provision and clause (FAR 52.225-3 
and 52.225-4). Similarly, like NAFTA, the Bahrain FTA threshold for 
construction is higher than the thresholds of the other FTAs. Therefore 
Bahrainian construction material is excluded from coverage under the 
Buy American Act--Construction Materials under Trade Agreements 
provision and clause (52.225-11 and 52.225-12) for acquisitions less 
than $8,422,165 (Alternate I).
    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 interim rule is not expected to 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 goods and services of Guatemala 
and Bahrain, the Councils do not anticipate any significant economic 
impact on U.S. small businesses. The Department of Defense only applies 
the trade agreements to the non-defense items listed at DFARS 225.401-
70, and acquisitions that are set aside for small businesses are 
exempt. Therefore, an Initial Regulatory Flexibility Analysis has not 
been performed. The Councils will consider comments from small entities 
concerning the affected FAR Parts 25 and 52 in accordance with 5 U.S.C. 
610. Interested parties must submit such comments separately and should 
cite 5

[[Page 67777]]

U.S.C. 601, et seq. (FAC 2005-14, FAR case 2006-017), in 
correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply, because the interim rule 
affects the certification and information collection requirements in 
the provisions at FAR 52.212-3, 52.225-4, 52.225-6, and 52.225-11 
currently approved under OMB clearances 9000-0136, 9000-0130, 9000-
0025, and 9000-0141 respectively. The impact, however, is negligible.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the CAFTA-DR took effect with respect to Guatemala 
on July 1, 2006, and the Bahrain FTA took effect on August 1, 2006. 
However, pursuant to Public Law 98-577 and FAR 1.501, the Councils will 
consider public comments received in response to this interim rule in 
the formation of the final rule.

List of Subjects in 48 CFR Parts 25 and 52

    Government procurement.

    Dated: November 15, 2006.
Ralph De Stefano,
Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 25 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 25 and 52 continues to read 
as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 25--FOREIGN ACQUISITION


25.003   [Amended]

0
2. Amend section 25.003 by--
0
a. Removing from the definition ``Caribbean Basin country'', 
``Guatemala,'';
0
b. Adding to the definition in paragraph (2) of ``Designated country'', 
``Bahrain,'' after ``Australia,'' and ``Guatemala,'' after ``El 
Salvador,'', and removing from paragraph (4), ``Guatemala,''; and
0
c. Adding to the definition ``Free Trade Agreement country'', 
``Bahrain,'' after ``Australia,'' and ``Guatemala,'' after ``El 
Salvador,''.
0
3. Amend section 25.400 by removing from the end of paragraph (a)(2)(v) 
``and''; adding at the end of paragraph (a)(2)(vi) ``and''; and adding 
a new paragraph (a)(2)(vii) to read as follows:


25.400   Scope of subpart.

    (a) * * *
    (2) * * *
    (vii) United States-Bahrain Free Trade Agreement, as approved by 
Congress in the United States-Bahrain Free Trade Agreement 
Implementation Act (Pub. L. 109-169);
* * * * *
0
4. Amend section 25.401(b) by revising the third column of the table 
heading to read as follows:


25.401   Exceptions.

* * * * *
    (b) * * *

* * *         * * *         Bahrain FTA, CAFTA-DR, Chile    * * *
                             FTA, and NAFTA
 

* * * * *


25.402  [Amended]

0
5. Amend section 25.402(b), in the table, by adding after ``Australia 
FTA'' the entry ``Bahrain FTA'' and in its corresponding line items 
``$193,000'', ``$193,000'', and ``$8,422,165'', respectively; and 
adding ``Guatemala,'' after ``El Salvador,''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.212-3  [Amended]

0
6. Amend section 52.212-3 by--
0
a. Revising the date of the clause to read ``(NOV 2006)'';
0
b. Adding in the second sentence of paragraph (g)(1)(i), ``Bahrainian 
end product,'' after ``The terms''; and
0
c. Removing from paragraph (g)(1)(ii), ``(other than Moroccan end 
products)'' and adding ``(other than Bahrainian or Moroccan end 
products)'' in its place, and removing from the table heading ``(Other 
than Moroccan End Products)'' and adding ``(Other than Bahrainian or 
Moroccan End Products)'' in its place.
0
7. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Revising paragraph (b)(24)(i); and
0
c. Removing from paragraph (b)(25) ``(JUN 2006)'' and adding ``(NOV 
2006)'' in its place.
    The revised text reads as follows:


52.212-5  Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *
    CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR 
EXECUTIVE ORDERS--COMMERCIAL ITEMS (NOV 2006)
* * * * *
    (b) * * *
    (24)(i) 52.225-3, Buy American Act--Free Trade Agreements--Israeli 
Trade Act (NOV 2006) (41 U.S.C. 10a-10d, 19 U.S.C. 3301 note, 19 U.S.C. 
2112 note, Pub. L 108-77, 108-78, 108-286, 109-53 and 109-169).
* * * * *
0
8. Amend section 52.225-3 by--
0
a. Revising the date of the clause;
0
b. Adding in paragraph (a), in alphabetical order, the definition 
``Bahrainian end product'';
0
c. Adding in the definition ``Free Trade Agreement country'' 
``Bahrain,'' after ``Australia,'' and ``Guatemala,'' after ``El 
Salvador,''; and
0
d. Removing from the first sentence of paragraph (c) ``(except the 
Morocco FTA)'' and adding ``(except the Bahrain and Morocco FTA)'' in 
its place; removing from the fourth sentence ``(other than a Moroccan 
end product)'' each time it appears (twice); and adding ``(other than a 
Bahrainian or Moroccan end product)'' in its place.
    The revised text reads as follows:


52.225-3  Buy American Act--Free Trade Agreements--Israeli Trade Act.

* * * * *
    BUY AMERICAN ACT--FREE TRADE AGREEMENTS--ISRAELI TRADE ACT (NOV 
2006)
    (a) Definitions. * * *
    Bahrainian end product means an article that--
    (1) Is wholly the growth, product, or manufacture of Bahrain; or
    (2) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
Bahrain 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 the article, provided that the value of those 
incidental services does not exceed that of the article itself.
* * * * *


52.225-4  [Amended]

0
9. Amend section 52.225-4 by--
0
a. Revising the date of the clause to read ``(NOV 2006)'';
0
b. Adding to the second sentence in paragraph (a) ``Bahrainian end 
product,'' after ``The terms''; and
0
c. Removing from paragraph (b), ``(other than Moroccan end products)''

[[Page 67778]]

and adding ``(other than Bahrainian or Moroccan end products)'' in its 
place, and removing from the table heading ``(Other than Moroccan End 
Products)'' and adding ``(Other than Bahrainian or Moroccan End 
Products)'' in its place.
0
10. Amend section 52.225-5 by--
0
a. Revising the date of the clause;
0
b. Revising paragraph (2) of the definition ``Designated country''; and
0
c. Removing from paragraph (4) of the definition ``Designated 
country'', ``Guatemala,''.
    The revised text reads as follows:


52.225-5  Trade Agreements.

* * * * *
    TRADE AGREEMENTS (NOV 2006)
* * * * *
    (a) * * *
    Designated country * * *
    (2) A Free Trade Agreement country (Australia, Bahrain, Canada, 
Chile, El Salvador, Guatemala, Honduras, Mexico, Morocco, Nicaragua, or 
Singapore);
* * * * *
0
11. Amend section 52.225-11 by--
0
a. Revising the date of the clause;
0
b. Revising paragraph (2) of the definition ``Designated country'';
0
c. Removing ``Guatemala'' from paragraph (4) of the definition 
``Designated country''; and
0
d. Revising Alternate I.
    The revised text reads as follows:


52.225-11  Buy American Act--Construction Materials under Trade 
Agreements.

* * * * *
    BUY AMERICAN ACT--CONSTRUCTION MATERIALS UNDER TRADE AGREEMENTS 
(NOV 2006)
* * * * *
    (a) * * *
    Designated country * * *
    (2) A Free Trade Agreement country (Australia, Bahrain, Canada, 
Chile, El Salvador, Guatemala, Honduras, Mexico, Morocco, Nicaragua, or 
Singapore);
* * * * *
    Alternate I (NOV 2006). As prescribed in 25.1102(c)(3), add the 
following definitions of ``Bahrainian construction material'' and 
``Mexican construction material'' to paragraph (a) of the basic 
clause, and substitute the following paragraphs (b)(1) and (b)(2) 
for paragraphs (b)(1) and (b)(2) of the basic clause:
    Bahrainian construction material means a construction material 
that--
    (1) Is wholly the growth, product, or manufacture of Bahrain; 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 into a new and different construction material 
distinct from the materials from which it was transformed.
    Mexican construction material means a construction material that--
    (1) Is wholly the growth, product, or manufacture of 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 Mexico into a new and different construction material 
distinct from the materials from which it was transformed.
    (b) Construction materials. (1) This clause implements the Buy 
American Act (41 U.S.C. 10a - 10d) by providing a preference for 
domestic construction material. In addition, the Contracting Officer 
has determined that the WTO GPA and all the Free Trade Agreements 
except NAFTA apply to this acquisition. Therefore, the Buy American Act 
restrictions are waived for designated country construction materials 
other than Bahrainian or Mexican construction materials.
    (2) The Contractor shall use only domestic or designated country 
construction material other than Bahrainian or Mexican construction 
material in performing this contract, except as provided in paragraphs 
(b)(3) and (b)(4) of this clause.
0
12. Amend section 52.225-12 in Alternate II, by revising the date of 
the alternate, the introductory text, paragraph (d)(1), and the first 
sentence of the introductory text of paragraph (d)(3) to read as 
follows:


52.225-12  Notice of Buy American Act Requirement--Construction 
Materials Under Trade Agreements.

* * * * *
    Alternate II (NOV 2006). As prescribed in 25.1102(d)(3), add the 
definitions of ``Bahrainian construction material'' and ``Mexican 
construction material'' to paragraph (a) and substitute the 
following paragraph (d) for paragraph (d) of the basic provision:
    (d) Alternate offers. (1) When an offer includes foreign 
construction material, except foreign construction material from a 
designated country other than Bahrain or Mexico, that is not listed by 
the Government in this solicitation in paragraph (b)(3) of FAR clause 
52.225-11, the offeror also may submit an alternate offer based on use 
of equivalent domestic or designated country construction material 
other than Bahrainian or Mexican construction material.
* * * * *
    (3) If the Government determines that a particular exception 
requested in accordance with paragraph (c) of FAR clause 52.225-11 does 
not apply, the Government will evaluate only those offers based on use 
of the equivalent domestic or designated country construction material 
other than Bahrainian or Mexican construction material. * * *
* * * * *
[FR Doc. 06-9306 Filed 11-21-06; 8:45 am]
BILLING CODE 6820-EP-S