Federal Register / Vol. 62, No. 174 / Tuesday, September 9, 1997 / Proposed Rules 47407

For information regarding proper

filing procedures for comments, See 47

CFR 1.415 and 1.420.

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 97–23823 Filed 9–8–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF DEFENSE

48 CFR Parts 212, 225, and 252

[DFARS Case 7–D022

Defense Federal Acquisition

Regulation Supplement; Buy American

Act Exception for Information

Technology Products

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for

comments.

SUMMARY: The Director of Defense

Procurement is proposing to amend the

Defense Federal Acquisition Regulation

Supplement (DFARS) to implement the

determination by the Under Secretary of

Defense (Acquisition & Technology) that

it is not in the public interest to apply

the restrictions of the Buy American Act

to U.S. made information technology

products, in acquisition subject to the

Trade Agreements Act.

DATES: Comment date: Comments on the

proposed rule should be submitted in

writing to the address shown below on

or before November 10, 1997, to be

considered in the formulation of the

final rule.

ADDRESSES: Interested parties should

submit written comments to: Defense

Acquisition Regulations Council, Attn:

Ms. Amy Williams, PDUSD (A&T) DP

(DAR), IMD 3D139, 3062 Defense

Pentagon, Washington, DC 20301–3062.

Telefax number (703) 602–0350. Please

cite DFARS Case 97–D022 in all

correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT:

Ms. Amy Williams, (703) 602–0131.

SUPPLEMENTARY INFORMATION:

Background

This proposed rule adds a provision

at DFARS 252.225–7020, Trade

Agreements Certificate, and a clause at

DFARS 252.225–7021, Trade

Agreements, and makes other necessary

amendments in DFARS Parts 212 and

225 to implement the determination,

signed by the Under Secretary of

Defense (Acquisition & Technology)

(USD (A&T)) on May 16, 1997, that it is

not in the public interest, in

acquisitions subject to the Trade

Agreements Act, to apply the

restrictions of the Buy American Act to

U.S. made information technology

products in Federal Supply Group 70 or

74. Federal Supply Group 70 includes

general purpose automatic data

processing equipment, software

(including firmware), supplies, and

support equipment. Federal Supply

Group 74 includes office machines and

visible record equipment.

In the determination and finding,

USD (A&T) explains how the different

rules of origin under the Trade

Agreements Act and the Buy American

Act result in evaluating products

substantially transformed in the United

States less favorably than if the product

were substantially transformed in an

eligible country. UDS (A&T) also finds

that the different rules of origin place a

disproportionately burdensome

recordkeeping requirement on United

States firms offering information

technology products. Because

manufacturers of information

technology products commonly use

worldwide sources for components,

requiring manufacturers to distinguish

between foreign and domestic

components represents a significant

deterrent to the acquisition of both

commercial and state-of-the-art

information technology products by

DoD.

Regarding the certification

requirements of this rule, for acquisition

of information technology products

subject to the Trade Agreements Act, the

certification requirement in paragraph

(c) of the proposed provision at

252.225–7020, Trade Agreements

Certificate, replaces and simplifies the

existing certification requirement in

paragraph (c) of the provision at DFARS

252.225–7006, Buy American Act—

Trade Agreements—Balance of

Payments Program Certificate.

Therefore, for the purposes of Section

29 of the Office of Federal Procurement

Policy Act (41 U.S.C. 425), this rule

does not impose a new certification

requirement.

B. Regulatory Flexibility Act

This rule may 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. An Initial

Regulatory Flexibility Analysis has been

prepared and is summarized as follows:

The rule will apply to all offerors/

contractors offering information

technology products in Federal Supply

Group 70 or 74 to DoD, in acquisitions

valued at $190,000 or more. The rule

will particularly benefit offerors of U.S.

made information technology end

products that do not qualify as domestic

end products. However, suppliers of

domestic information technology

products will also benefit to the extent

that they no longer need to track the

source of components. The rule will

also affect suppliers of components for

such information technology products,

to the extent that suppliers of domestic

components may face increased

competition from suppliers of foreign

components.

With regard to the provision at

252.225–7003, Information for DutyFree Entry Evaluation, the rule will have

a positive impact on small entities,

because the rule prescribes use of the

provision in solicitation that include the

clause FAR 52.225–10, Duty-Free Entry,

rather than all solicitations that include

the clause at 252.225–7001, Buy

American Act and Balance of Payments

Program. This will reduce the number of

respondents by about 100,000, of which

it is estimated that 35 percent may be

small businesses, as it is generally the

acquisitions of less than $100,000 that

will no longer include the provision. In

addition, responses to the questions in

paragraph (b) of the provision are no

longer required for eligible products

under a trade agreement, or for

nonqualifying country components of

domestic end products (U.S. made end

products if Alternate I is used) unless

the offeror plans to request duty-free

entry.

A copy of the Initial Regulatory

Flexibility Analysis may be obtained

from the address specified herein.

Comments are invited from small

businesses and other interested parties.

Comments from small entities

concerning the affected DFARS subparts

also will be considered in accordance

with 5 U.S.C. 610. Such comments

should be submitted separately and

should cite DFARS Case 97–D022 in

correspondence.

C. Paperwork Reduction Act

This rule will result in a reduction of

paperwork burden on offerors. The

existing certification requirement at

DFARS 252.225–7006, Buy American

Act-Trade Agreements-Balance of

Payments Program Certificate, has an

approved information collection

requirement under Office of

Management and Budget (OMB)

Clearance Number 0704–0259. This rule

creates a certificate for use when the

Trade Agreements Act, but neither the

Buy American Act nor the Balance of

Payments Program, applies. This
47408 Federal Register / Vol. 62, No. 174 / Tuesday, September 9, 1997 / Proposed Rules

certificate is shorter than the Buy

American Act-Trade AgreementsBalance of Payments Program Certificate

and, therefore, reduces the burden on

offerors.

In addition, the information collection

requirements contained in the clause at

DFARS 252.225–7003, Information for

Duty-Free Entry Evaluation, are

approved under OMB Clearance

Number 0704–0187. It is estimated that

by narrowing the clause prescription,

limiting the requirement to respond

when supplying domestic end products,

and providing an alternate applicable to

acquisitions of information technology

products subject to the Trade

Agreements Act, the amendments in

this rule will result in an annual

reduction of more than 486,000 hours in

the paperwork burden.

List of Subjects in 48 CFR Part 212, 225,

and 252

Government procurement.

Michele P. Peterson,

Executive Editor Defense Acquisition

Regulations Council.

Therefore, 48 CFR Part 212, 225, and

252 are proposed to be amended as

follows:

1. The authority citation for 48 CFR

Parts 212, 225, and 252 continues to

read as follows:

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

Chapter 1.

PART 212—ACQUISITION OF

COMMERCIAL ITEMS

2. Section 212.301 is amended by

redesignating paragraph (f)(i)(C) as

(f)(i)(D), and by adding a new paragraph

(f)(i)(C) to read as follows:

212.301 Solicitation provisions and

contract clauses for the acquisition of

commercial items.

(f)(i) * * *

(C) 252.225–7020, Trade Agreements

Certificate.

* * * * *

PART 225—FOREIGN ACQUISITION

3. Section 225.000–70 is amended by

revising paragraph (m) to read as

follows:

225.000–70 Definitions.

* * * * *

(m) U.S. made end product is defined

in the clauses at 252.225–7007, Buy

American Act-Trade AgreementsBalance of Payments Program, and

252.225–7021, Trade Agreements. 4. Section 225.000–71 is amended by

revising paragraph (c)(2) to read as

follows:

225.000–71 General guidelines.

* * * * *

(c) * * *

(2) If the product is an eligible

product under subpart 225.4, evaluate

the offer under FAR 25.402, 225.105,

and 225.402.

* * * * *

5. Section 225.102 is amended by

revising paragraph (a)(3)(A),

redesignating paragraphs (a)(3)(B) and

(a)(3)(C) as paragraphs (a)(3)(C) and

(a)(3)(D) respectively, and by adding a

new paragraph (a)(3)(B) to read as

follows:

225.102 Policy.

(a) * * *

(3)(A) Specific public interest

exceptions for DoD for certain countries

are in 225.872.

(B) The Under Secretary of Defense

(Acquisition & Technology) has

determined that, for procurements

subject to the Trade Agreements Act, it

is inconsistent with the public interest

to apply the Buy American Act to

information technology products in

Federal Supply Group 70 or 74 that are

substantially transformed in the United

States.

* * * * *

6. Section 225.105 is amended by

revising the introductory text and

paragraphs (1), (2), and (3) to read as

follows:

225.105 Evaluating offers.

Use the following procedures instead

of those in FAR 25.105. These

evaluation procedures do not apply to

acquisitions of information technology

end products in Federal Supply Group

70 or 74 that are subject to the Trade

Agreements Act. (1) Treat offers of eligible products

under acquisitions subject to trade

agreements as qualifying country offers.

Treat all other offers, except domestic

offers, as nonqualifying country offers

(see Example 4 in Table 25–1,

Evaluation).

(2) Except as provided in paragraph

(3) of this section, evaluate offers by

adding a 50 percent factor to the price

(including duty) of each nonqualifying

country offer (see Example 1 in Table

25–1, Evaluation).

(i) Nonqualifying country offers

include duty in the offered price. When

applying the factor, evaluate based on

the inclusion of duty, whether or not

duty is to be exempted. If award is made

on the nonqualifying country offer and

duty is to be exempted through

inclusion of the clause at FAR 52.225–

10, Duty-Free Entry, award at the

offered price minus the amount of duty

identified in the provision at 252.225–

7003, Information for Duty-Free Entry

Evaluation. See Example 1, Alternate II,

in Table 25–1, Evaluation.

(ii) When a nonqualifying country

offer includes more than one line item,

apply the 50 percent factor—

(A) On an item-by-item basis; or

(B) On a group of items, if the

solicitation specifically provides for

award on a group basis.

(3) When application of the factor

would not result in the award of a

domestic end product, i.e., when no

domestic offers are received (see

Example 3 of Table 25–1, Evaluation) or

when a qualifying country offer is lower

than the domestic offer (see Example 2

of Table 25–1, Evaluation), evaluate

nonqualifying country offers without

the 50 percent factor.

(i) If duty is to be exempted through

inclusion of the clause at FAR 52.225–

10, Duty-Free Entry, evaluate the

nonqualifying country offer exclusive of

duty by reducing the offered price by

the amount of duty identified in the

clause at 252.225–7003, Information for

Duty-Free Entry Evaluation (see

Examples 2 and 3, Alternate II, of Table

25–1, Evaluation). If award is made on

the nonqualifying country offer, award

at the offered price minus duty.

(ii) If duty is not to be exempted,

evaluate the nonqualifying country offer

inclusive of duty (see Examples 2 and

3, Alternate I, of Table 25–1,

Evaluation).

* * * *

7. Section 225.109 is amended by

revising paragraphs (a) and (d)(i) to read

as follows:

§ 225.109 Solicitation provisions and

contract clauses.

(a) Use the provision at 252.225–7000,

Buy American Act-Balance of Payments

Program Certificate, instead of the

provisions at FAR 52.225–1, Buy

American Certificate, and FAR 52.225–

6, Balance of Payments Program

Certificate. Use the provision in any

solicitation which includes the clause at

252.225–7001, Buy American Act and

Balance of Payments Program, unless

the solicitation includes either the

clause at 252.225–7007, Buy American

Act-Trade Agreements-Balance of

Payments Program, or the clause at

252.225–7036, North American Free

Trade Agreement Implementation Act.

* * * * *

(d) * * *

(i) Do not use the clause if an

exception to the Buy American Act or

Balance of Payments Program is known

to apply. Do not use the clause when the

clause at 252.225–7021, Trade

Agreements, is used.

* * * * *

8. Section 225.109–70 is revised to

read as follows:
Federal Register / Vol. 62, No. 174 / Tuesday, September 9, 1997 / Proposed Rules 47409

§ 225.109–70 Additional provisions and

clauses.

(a) Use the clause at 252.225–7002,

Qualifying Country Sources as

Subcontractors, in all solicitations and

contracts that include the clause at

252.225–7001, Buy American Act and

Balance of Payments Program, or the

clause at 252.225–7021, Trade

Agreements.

(b) When only domestic ends

products are acceptable, the solicitation

must make a statement to that effect.

9. Section 225.302 is amended by

revising paragraphs (a)(iii) and (a)(iv),

and by adding a new paragraph (a)(v) to

read as follows:

§ 225.302 Policy.

(a) * * *

(iii) Do not apply to qualifying end

products;

(iv) Do not apply to articles, materials,

or supplies produced or manufactured

in Panama when purchased by and for

the use of U.S. forces in Panama; and

(v) For acquisitions subject to the

Trade Agreements Act, do not apply to

information technology products in

Federal Supply Group 70 or 74 that are

substantially transformed in the United

States.

* * * * *

10. Section 225.402 is amended by

revising paragraph (a)(1) to read as

follows:

§ 225.402 Policy.

(a) * * *

(1) See 225.105 for evaluation of

eligible products and U.S. made end

products, except when acquiring

information technology end products in

Federal Supply Group 70 or 74 that are

subject to the Trade Agreements Act.

* * * * *

11. Section 225.408 is amended by

revising paragraphs (a)(1) and (a)(2), by

redesignating paragraphs (a)(3) and

(a)(4) as paragraphs (a)(5) and (a)(6)

respectively, and by adding new

paragraphs (a)(3) and (a)(4) to read as

follows:

§ 225.408 Solicitation provisions and

contract clauses.

(a)(1) Use the provision at 252.225–

7006, Buy American Act-Trade

Agreements-Balance of Payments

Program Certificate, instead of the

provision at FAR 52.225–8, Buy

American Act-Trade AgreementsBalance of Payments Program

Certificate, in all solicitations that

include the clause at 252.225–7007, Buy

American Act-Trade AgreementsBalance of Payments Program.

(2) Except as provided in

225.408(a)(4), use the clause at 252.225–

7007, Buy American Act-Trade

Agreements-Balance of Payments

Program, instead of the clause at FAR

52.225–9, Buy American Act-Trade

Agreements-Balance of Payments

Program. The clause need not be used

where purchase from foreign sources is

restricted (see 225.403(d)(1)(B)). The

clause may be used where the

contracting officer anticipates a waiver

of the restriction. For procurements by

the U.S. Army Corps of Engineers, use

the clause with its Alternate I.

(3) Use the provision at 252.225–7020,

Trade Agreements Certificate, in all

solicitations that include the clause at

252.225–7021, Trade Agreements.

(4) Use the clause at 252.225–7021,

Trade Agreements, instead of the clause

at FAR 52.225–9, Buy American Act—

Trade Agreements—Balance of

Payments Program, when acquiring

information technology products in

Federal Supply Group 70 or 74. For

procurements by the U.S. Army Corps of

Engineers, use the clause with its

Alternate I.

* * * * *

12. Section 225.603 is amended by

revising paragraph (5) to read as follows:

225.603 Procedures.

* * * * *

(5) Exclude from the evaluation of

domestic end products, or information

technology end products in Federal

Supply Group 70 or 74 in acquisitions

subject to the Trade Agreements Act,

any duty for nonqualifying country

components listed in the provision at

252.225–7003, Information for DutyFree Entry Evaluation, for which dutyfree entry will be granted. Except for

acquisitions of information technology

end products in Federal Supply Group

70 or 74 subject to the Trade

Agreements Act, apply the evaluation

procedures for the Buy American Act in

accordance with 225.105.

* * * * *

13. Section 225.605–70 is amended by

adding paragraph (e) to read as follows:

225.605–70 Additional solicitation

provisions and contract clauses.

* * * * *

(e) Use the provision at 252.225–7003,

Information for Duty-Free Entry

Evaluation, in all solicitations that

include the clause at FAR 52.225–10,

Duty-Free Entry. Use the provision with

its Alternate I when the clause at

252.225–7021, Trade Agreements, is

used.

14. Section 225.872–4 is amended by

revising the introductory text of

paragraph (c) to read as follows:

225.872–4 Evaluation of offers.

* * * * *

(c) Evaluate offers of end products

from the qualifying country sources in

225.872–1(b) without application of the

50 percent Buy American Act or

Balance of Payments Program

evaluation factor. If the offer, as

evaluated, is low or otherwise eligible

for award, the contracting officer shall

request an exemption of the Buy

American Act/Balance of Payments

Program as inconsistent with the public

interest, unless another exception such

as the Trade Agreements Act applies.

* * * * *

PART 252—SOLICITATION

PROVISIONS AND CONTRACT

CLAUSES

15. Section 252.212–7001 is amended

by revising the clause date; in paragraph

(b) by removing the entry ‘‘ll

252.225–7007 Trade Agreements (10

U.S.C. 2502–2582)’’; and in paragraph

(b) by adding entries, in numerical

order, 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.

* * * * *

Contract Terms and Conditions Required to

implement statutes or Executive Orders

Applicable to Defense Acquisitions of

Commercial Items (lll 19ll)

* * * * *

(b) * * *

llll 252.225–7007 Buy American

Act—Trade Agreements—Balance of

Payments Programs.

(llll Alternate I) (41 U.S.C. 10a–10d,

19 U.S.C. 2501–2518, and 19 U.S.C. 3301

note)

* * * * *

llll 252.225–7021 Trade

Agreements

(llll Alternate I) (19 U.S.C.

2501–2518 and 19 U.S.C. 3301 note)

* * * * *

16. Section 252.225–7003 is amended

by revising the introductory text, the

clause date, and paragraph (a); by

removing paragraph (d); and by adding

Alternate I. The revised and added text

reads as follows:

252.225–7003 Information for duty-free

entry evaluation.

As prescribed in 225.605–70(e), use

the following provision:

Information for Duty-Free Entry Evaluation

(xxx 19xx)

(a) Does the offeror propose to furnish—

(1) A domestic end product with

nonqualifying country components for which

the offeror requests duty-free entry; or
47410 Federal Register / Vol. 62, No. 174 / Tuesday, September 9, 1997 / Proposed Rules

(2) A foreign end product consisting of end

items, components, or material of foreign

origin other than those that will be accorded

duty-free entry as qualifying country end

products or components, or eligible products

under a trade agreement?

Yes ( )

No ( )

* * * * *

ALTERNATE I (xxx 19xx). As prescribed in

225.605–70(e), substitute the following

paragraph (a) for paragraph (a) of the basic

clause:

(a) Does the offeror propose to furnish a

U.S. made end product with nonqualifying

country components for which the offeror

requests duty-free entry?

Yes ( )

No ( )

17. Section 252.225–7007 is amended

by revising the section heading, and the

clause title and date to read as follows:

252.225–7007 Buy American Act—Trade

agreements—Balance of payments

program.

* * * * *

Buy American Act—Trade

Agreements—Balance of Payments

Program

(xxx 19xx)

* * * * *

18. Section 252.225–7020 is added to

read as follows:

252.225–7020 Trade Agreements

certificate.

As prescribed in 225.408(a)(3), use the

following provision:

Trade Agreements Certificate (xxx 19xx)

(a) Definitions.

‘‘Caribbean Basin country end product,’’

‘‘designated country end product,’’ ‘‘NAFTA

country end product,’’ ‘‘nondesignated

country end product,’’ ‘‘qualifying country

end product,’’ and ‘‘U.S. made end product’’

have the meanings given in the Trade

Agreements clause of this solicitation.

(b) Evaluation.

Offers will be evaluated in accordance with

the policies and procedures of Part 225 of the

Defense Federal Acquisition Regulation

Supplement. Offers of foreign end products

that are not U.S. made, qualifying country,

designated country, Caribbean Basin country,

or NAFTA country end products will not be

considered for award, unless the Contracting

Officer determines that there are no offers of

such end products; or the offers of such end

products are insufficient to fulfill the

requirements; or a national interest exception

to the Trade Agreements Act is granted.

(c) Certifications.

(1) The Offeror certifies that each end

product to be delivered under this contract,

except those listed in paragraph (c)(2) of this

provision, is a U.S. made, qualifying country,

designated country, Caribbean Basin country,

or NAFTA country end product.

(2) The following supplies are other

nondesignated country end products:

(insert line item number)

lllllllllllllllllllll

(insert country of origin)

lllllllllllllllllllll

(End of provision)

19. Section 252.225–7021 is added to

read as follows:

252.225–7021 Trade Agreements.

As prescribed in 225.408(a)(4), insert

the following clause:

Trade Agreements (xxx 19xx)

(a) Definitions.

As used in this clause—

(1) Caribbean Basin country means—

Antigua and Barbuda

Aruba

Bahamas

Barbados

Belize

British Virgin Islands

Costa Rica

Dominica

Dominican Republic

El Salvador

Grenada

Guatemala

Guyana

Haiti

Honduras

Jamaica

Montserrat

Netherlands Antilles

Nicaragua

Panama

St. Kitts-Nevis

St. Lucia

St. Vincent and the Grenadines

Trinidad and Tobago

(2) Caribbean Basin country end product.—

(i) Means an article that—

(A) Is wholly the growth, product, or

manufacture of a Caribbean Basin country; or

(B) In the case of an article that consists in

whole or in part of materials from another

country or instrumentality, has been

substantially transformed in a Caribbean

Basin country 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 so 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.

(ii) Excludes products, other than

petroleum and any product derived from

petroleum, that are not granted duty-free

treatment under the Caribbean Basin

Economic Recovery Act (19 U.S.C. 2703(b)).

These exclusions presently consist of—

(A) Textiles and apparel articles that are

subject to textile agreements;

(B) Footwear, handbags, luggage, flat

goods, work gloves, and leather wearing

apparel not designated as eligible articles for

the purpose of the Generalized System of

Preferences under Title V of the Trade Act of

1974;

(C) Tuna, prepared or preserved in any

manner in airtight containers; and

(D) Watches and watch parts (including

cases, bracelets, and straps) of whatever type,

including, but not limited to, mechanical,

quartz digital, or quartz analog, if such

watches or watch parts contain any material

that is the product of any country to which

Harmonized Tariff Schedule column 2 rates

of duty apply.

(3) Components means those articles,

materials, and supplies directly incorporated

into end products.

(4) Designated country means—

Aruba

Austria

Bangladesh

Belgium

Benin

Bhutan

Botswana

Burkina Faso

Burundi

Canada

Cape Verde

Central African Republic

Chad

Comoros

Denmark

Djibouti

Equatorial Guinea

Finland

France

Gambia

Germany

Greece

Guinea

Guinea-Bissau

Haiti

Hong Kong

Ireland

Israel

Italy

Japan

Kiribati

Lesotho

Liechtenstein

Luxembourg

Malawi

Maldives

Mali

Mozambique

Nepal

Netherlands

Niger

Norway

Portugal

Republic of Korea

Rwanda

Sao Tome and Principe

Sierra Leone

Singapore

Somalia

Spain

Sweden

Switzerland

Tanzania U.R.

Togo

Tuvalu

Uganda

United Kingdom

Vanuatu

Western Samoa

Yemen

(5) Designated country end product means

an article that—

(i) Is wholly the growth, product, or

manufacture of the designated country; or
Federal Register / Vol. 62, No. 174 / Tuesday, September 9, 1997 / Proposed Rules 47411

(ii) In the case of an article that consists in

whole or in part of materials from another

country or instrumentality, has been

substantially transformed in a designated

country 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 so 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.

(6) End product means those articles,

materials, and supplies to be acquired for

public use under the contract. For this

contract, the end products are the line items

to be delivered to the Government (including

supplies to be acquired by the Government

for public use in connection with service

contracts, but excluding installation and

other services to be performed after delivery).

(7) NAFTA country end product means an

article that—

(i) Is wholly the growth, product, or

manufacture of the NAFTA country; or

(ii) In the case of an article that consists in

whole or in part of materials from another

country or instrumentality, has been

substantially transformed in a NAFTA

country 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 so 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.

(8) Nondesignated country end product

means any end product that is not a U.S.

made end product or a designated country

end product.

(9) North American Free Trade Agreement

(NAFTA) country means Canada or Mexico.

(10) Qualifying country means any country

set forth in subsection 225.872–1 of the

Defense Federal Acquisition Regulation

(FAR) Supplement.

(11) Qualifying country end product

means—

(i) An unmanufactured end product mined

or produced in a qualifying country; or

(ii) An end product manufactured in a

qualifying country if the cost of the

components mined, produced, or

manufactured in the qualifying country and

its components mined, produced, or

manufactured in the United States exceeds

50 percent of the cost of all its components.

(12) United States means the United States,

its possessions, Puerto Rico, and any other

place subject to its jurisdiction, but does not

include leased bases or trust territories.

(13) U.S. made end product means an

article that—

(i) Is wholly the growth, product, or

manufacture of the United States; or

(ii) In the case of an article that consists in

whole or in part of materials from another

country or instrumentality, has been

substantially transformed in the United

States 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 so transformed.

(b) Unless otherwise specified, the Trade

Agreements Act of 1979 (19 U.S.C. 2501 et

seq.), the North American Free Trade

Agreement Implementation Act of 1993 (19

U.S.C. 3301 note), and the Caribbean Basin

Initiative apply to all items in the Schedule.

(c) (1) The Contractor agrees to deliver

under this contract only U.S. made,

qualifying country, designated country,

Caribbean Basin country, or NAFTA country

end products unless, in its offer, it specified

delivery of other nondesignated country end

products in the Trade Agreements Certificate

provision of the solicitation.

(2) The Contractor may not supply a

nondesignated country end product other

than a qualifying country end product, a

Caribbean Basin country end product, or a

NAFTA country end product, unless—

(i) The Contracting Officer has determined

that offers of U.S. made end products or

qualifying, designated, Caribbean Basin, or

NAFTA 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 under section 302 of the Trade

Agreements Act of 1979 (see FAR 25.402(c)).

(d) The offered price of end products listed

under paragraph (c)(2) of the Trade

Agreements Certificate provision of the

solicitation must include all applicable duty,

whether or not a duty-free entry certificate

will be granted. The offered price of

qualifying country, designated country,

Caribbean Basin country, or NAFTA country

end products for line items subject to the

Trade Agreements Act, or the North

American Free Trade Agreement

Implementation Act, should not include

custom fees or duty. The offered price of U.S.

made end products should not include duty

for qualifying country components.

(End of clause)

ALTERNATIVE I (XXX 19XX). As

described in 225.408(a)(4), delete Singapore

from the list of designated countries in

paragraph (a)(4) of the basic clause.

252.225–7035 [Amended]

20. Section 252.225–7035 is amended

in the introductory text by revising the

reference ‘‘225.408(a)(3)’’ to read

‘‘225.408(a)(5)’’.

252.225–7036 [Amended]

21. Section 252.225–7036 is amended

in the introductory text by revising the

reference ‘‘225.408(a)(4)’’ to read

‘‘225.408(a)(6)’’.

[FR Doc. 97–23656 Filed 9–8–97; 8:45 am]

BILLING CODE 5000–04–M

DEPARTMENT OF VETERANS

AFFAIRS

48 CFR Parts 833 and 852

RIN 2900–AI51

VA Acquisition Regulation:

Department Protests

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

SUMMARY: This document proposes to

amend the Department of Veterans

Affairs (VA) Acquisition Regulations

(VAAR) to delete coverage which

duplicates or conflicts with the Federal

Acquisition Regulation; to delete

internal agency guidance to contracting

officers; to delete obsolete references to

the General Services Administration

Board of Contract Appeals; to

incorporate changes made by Federal

Acquisition Circular (FAC) 90–40, Item

XIII and FAC 90–45, Item XII; to publish

VA policy regarding the availability of

staff of the VA Board of Contract

Appeals to serve as third party neutrals

in alternative dispute resolution

proceedings; and to update clauses and

references. These changes will

implement VA policy and are required

to ensure that the VAAR corresponds

with the requirements of the Federal

Acquisition Regulation and public law.

DATES: Comments must be received on

or before November 10, 1997.

ADDRESSES: Mail or hand deliver written

comments to: Director, Office of

Regulations Management (02D),

Department of Veterans Affairs, 810

Vermont Avenue, NW, Room 1154,

Washington, DC 20420. Comments

should indicate that they are submitted

in response to ‘‘RIN: 2900–AI51.’’ All

written comments will be available for

public inspection in the Office of

Regulations Management, Room 1158,

between the hours of 8:00 a.m. and 4:30

p.m., Monday through Friday (except

holidays).

FOR FURTHER INFORMATION CONTACT: Don

Kaliher; Acquisition Policy Team (95A),

Office of Acquisition and Materiel

Management, Department of Veterans

Affairs, 810 Vermont Avenue, NW,

Washington DC 20420, (202) 273–8819.

SUPPLEMENTARY INFORMATION: As

provided by Public Law 104–106, the

Clinger-Cohen Act of 1996, the General

Services Administration Board of

Contract Appeals (GSBCA) no longer

hears bid protests. Therefore, obsolete

references to the GSBCA would be

removed from the VAAR.

This proposed rule would clarify an

existing VA procedure in 833.103(a),

which allows an interested party to file