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[Federal Register Volume 77, Number 222 (Friday, November 16, 2012)]
[Rules and Regulations]
[Pages 68699-68704]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27749]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 252

RIN 0750-AH79

Defense Federal Acquisition Regulation Supplement: New Free Trade 
Agreement--Panama (DFARS Case 2012-D044)

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

ACTION: Interim rule.

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SUMMARY: DoD is issuing an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement the United 
States-Panama Trade Promotion Agreement. This Trade Promotion Agreement 
is a free trade agreement that provides for mutually non-discriminatory 
treatment of eligible products and services from Panama.

DATES: Effective date: November 16, 2012.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before January 15, 2013, to be 
considered in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2012-D044, using 
any of the following methods:
    Regulations.gov: http://www.regulations.gov. Submit comments via 
the Federal eRulemaking portal by entering ``DFARS Case 2012-D044'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2012-D044.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2012-D044'' on your attached document.
    Email: dfars@osd.mil. Include DFARS Case 2012-D044 in the subject 
line of the message.
    Fax: 571-372-6094.
    Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
Williams, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

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 571-372-6106.

SUPPLEMENTARY INFORMATION: 

I. Background

    This interim rule amends DFARS part 252 to implement the United 
States-Panama Trade Promotion Agreement Implementation Act (Pub. L. 
112-43) (19 U.S.C. 3805 note).
    This Trade Promotion Agreement is designated in the FAR as the 
Panama Free Trade Agreement (FTA). The FTA provides for--
     Waiver of the applicability of the Buy American statute 
(41 U.S.C. chapter 83) for some foreign supplies and construction 
materials from Panama; and
     Applicability of specified procurement procedures designed 
to ensure fairness in the acquisition of supplies and services (see FAR 
25.408).

II. Discussion and Analysis

    This interim rule adds Panama to the definition of ``Free Trade 
Agreement country'' in multiple locations in the DFARS. The Panama FTA 
covers acquisitions of supplies and services equal to or exceeding 
$202,000. The Panama FTA threshold for supplies and services is higher 
than the threshold for supplies and services for most of the FTAs 
($77,494), and equals the Bahrain, Morocco, and Peru FTA thresholds for 
supplies and services ($202,000). Therefore, for acquisition less than 
$202,000 (or $100,000 for Korea), all FTAs are applicable except for 
the Bahrain, Korea, Morocco, Panama, and Peru FTAs.
    Because the Panama FTA's construction threshold of $7,777,000 is 
the same as the WTO GPA threshold, no new clause alternates are 
required for the Balance of Payments Program--

[[Page 68700]]

Construction Material under Trade Agreements clause (DFARS 252.225-
7045).
    There are also conforming changes to the clause at DFARS 252.212-
7001, Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders Applicable to Defense Acquisitions of Commercial 
Items.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    DoD does not expect this rule 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 now 
opens up Government procurement to the goods and services of Panama at 
or above the threshold of $202,000, DoD does 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 or 
provide other forms of preference for small businesses are exempt. FAR 
19.502-2 states that acquisitions that do not exceed $150,000 (with 
some exceptions) are automatically reserved exclusively for small 
business concerns. Therefore, DoD has not performed an Initial 
Regulatory Flexibility Analysis. DoD invites comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by the rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (DFARS Case 2012-D044), in 
correspondence.

V. Paperwork Reduction Act

    This rule affects the certification and information collection 
requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, 
currently approved under OMB Control Number 0704-229, titled Defense 
Federal Acquisition Regulation Supplement part 225, Foreign 
Acquisition, and related clauses, in accordance with the Paperwork 
Reduction Act (44 U.S.C. chapter 35). The impact, however, is 
negligible, because it is just a question of under which category 
offered goods from Panama would be listed. The rule also affects DFARS 
252.225-7018, which is a variant of the Buy American-trade agreements 
certifications already approved, which was issued as an interim rule 
under DFARS Case 2011-D046 (76 FR 78858, December 20, 2011).

VI. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the Free Trade Agreement with Panama, for which 
the President signed the implementing legislation into law on October 
21, 2012 (Pub. L. 112-043), took effect on October 31, 2012. This is a 
reciprocal agreement, approved by Congress and the President of the 
United States. It is important for the United States Government to 
honor its new trade obligations to Panama, as Panama in turn honors the 
new trade obligations to the United States. However, pursuant to 41 
U.S.C. 1707 and FAR 1.501-3(b), DoD will consider public comments 
received in response to this interim rule in the formation of the final 
rule.

List of Subjects in 48 CFR Part 252

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 252 is amended as follows:

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
1. The authority citation for 48 CFR part 252 continues to read as 
follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

252.212-7001  [Amended]

0
2. Section 252.212-7001 is amended as follows:
0
a. The clause heading is amended by removing the clause date ``(JUN 
2012)'' and adding ``(NOV 2012)'' in its place.
0
b. Paragraph (b)(12) is amended by removing the clause date ``(JUN 
2012)'' and adding ``(NOV 2012)'' in its place.
0
c. Paragraph (b)(13)(i) is amended by removing the clause date ``(JUN 
2012)'' and adding ``(NOV 2012)'' in its place.
0
d. Paragraphs (b)(16)(i), (iii), (v), and (vi) are amended by removing 
the clause date ``(JUN 2012)'' and adding ``(NOV 2012)'' in its place.

0
3. Section 252.225-7017 is amended--
0
a. In the clause heading, by removing the clause date ``(AUG 2012)'' 
and adding ``(NOV 2012)'' in its place;
0
b. In paragraph (a):
0
i. In the definition of ``designated country'', paragraph (ii), by 
adding in alphabetical order the country ``Panama,'';
0
ii. In the definition of ``Free Trade Agreement country'', by adding in 
alphabetical order the country ``Panama,''; and
0
iii. By adding in alphabetical order a definition for ``Panamanian 
photovoltaic device'';
0
c. By revising paragraphs (c)(3)and (4).
    The additions and revisions read as follows:

252.225-7017  Photovoltaic Devices.

* * * * *
    (a) * * *
    ``Panamanian photovoltaic device'' means an article that--
    (i) Is wholly manufactured in Panama; 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 
Panama 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.
* * * * *
    (c) * * *
    (3) $77,494 or more but less than $100,000, then the Contractor 
shall utilize under this contract only domestic photovoltaic devices, 
qualifying country photovoltaic devices, or Free Trade Agreement 
country photovoltaic devices (other than Bahrainian, Korean, Moroccan, 
Panamanian, or Peruvian photovoltaic devices), unless, in its offer, it 
specified utilization of other foreign photovoltaic devices in 
paragraph (c)(4)(ii) of the Photovoltaic Devices--Certificate provision 
of the solicitation. If the Contractor certified in its offer that it 
will utilize a qualifying country photovoltaic device or a Free Trade

[[Page 68701]]

Agreement country photovoltaic device (other than a Bahrainian, Korean, 
Moroccan, Panamanian, or Peruvian photovoltaic device), the Contractor 
shall utilize a qualifying country photovoltaic device; a Free Trade 
Agreement country photovoltaic device (other than a Bahrainian, Korean, 
Moroccan, Panamanian, or Peruvian photovoltaic device), or, at the 
Contractor's option, a domestic photovoltaic device;
    (4) $100,000 or more but less than $202,000, then the Contractor 
shall utilize under this contract only domestic photovoltaic devices, 
qualifying country photovoltaic devices, or Free Trade Agreement 
country photovoltaic devices (other than Bahrainian, Moroccan, 
Panamanian or Peruvian photovoltaic devices), unless, in its offer, it 
specified utilization of other foreign photovoltaic devices in 
paragraph (c)(4)(ii) of the Photovoltaic Devices--Certificate provision 
of the solicitation. If the Contractor certified in its offer that it 
will utilize a qualifying country photovoltaic device or a Free Trade 
Agreement country photovoltaic device (other than a Bahrainian, 
Moroccan, Panamanian, or Peruvian photovoltaic device), the Contractor 
shall utilize a qualifying country photovoltaic device; a Free Trade 
Agreement country photovoltaic device (other than a Bahrainian, 
Moroccan, Panamanian, or Peruvian photovoltaic device), or, at the 
Contractor's option, a domestic photovoltaic device; or
* * * * *

0
4. Section 252.225-7018 is amended by removing the clause date ``(MAY 
2012)'' and adding ``(NOV 2012)'' in its place and revising paragraphs 
(a), (c)(4), and (c)(5) to read as follows:

252.225-7018  Photovoltaic Devices--Certificate.

* * * * *
    (a) Definitions. ``Bahrainian photovoltaic device,'' ``Canadian 
photovoltaic device,'' ``Caribbean Basin photovoltaic device,'' 
``designated country,'' ``domestic photovoltaic device,'' ``foreign 
photovoltaic device,'' ``Free Trade Agreement country,'' ``Free Trade 
Agreement photovoltaic device,'' ``Korean photovoltaic device,'' 
``least developed country photovoltaic device,'' ``Moroccan 
photovoltaic device,'' ``Panamanian photovoltaic device,'' ``Peruvian 
photovoltaic device,'' ``photovoltaic device,'' ``qualifying country,'' 
``qualifying country photovoltaic device,'' ``United States,'' ``U.S.-
made photovoltaic device,'' and ``WTO GPA country photovoltaic device'' 
have the meanings given in the Photovoltaic Devices clause of this 
solicitation.
* * * * *
    (c) * * *
    (4) If $77,494 or more but less than $100,000--
    ----(i) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device; a qualifying country (except Australian or Canadian) 
photovoltaic device; a Free Trade Agreement country photovoltaic device 
(other than a Bahrainian, Korean, Moroccan, Panamanian, or Peruvian 
photovoltaic device) [Offeror to specify country of origin--------]; or
    ----(ii) The offered foreign photovoltaic devices (other than those 
from countries listed in paragraph (c)(4)(i) of this provision) are the 
product of ------------. [Offeror to specify country of origin, if 
known, and provide documentation that the cost of a domestic 
photovoltaic device would be unreasonable in comparison to the cost of 
the proposed foreign photovoltaic device.]
    (5) If $100,000 or more but less than $202,000--
    ----(i) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device; a qualifying country (except Australian or Canadian) 
photovoltaic device; a Free Trade Agreement country photovoltaic device 
(other than a Bahrainian, Moroccan, Panamanian, or Peruvian 
photovoltaic device) [Offeror to specify country of origin--------]; or
    ----(ii) The offered foreign photovoltaic devices (other than those 
from countries listed in paragraph (c)(4)(i) of this provision) are the 
product of ------------. [Offeror to specify country of origin, if 
known, and provide documentation that the cost of a domestic 
photovoltaic device would be unreasonable in comparison to the cost of 
the proposed foreign photovoltaic device.]
* * * * *

0
5. Section 252.225-7021 is amended by removing the clause date ``(JUN 
2012)'' and adding ``(NOV 2012)'' in its place, and in paragraph (a), 
in the definition for ``designated country,'' by revising paragraph 
(ii) to read as follows:

252.225-7021  Trade agreements.

* * * * *
    (a) * * *
    ``Designated country'' means--
* * * * *
    (ii) A Free Trade Agreement country (Australia, Bahrain, Canada, 
Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, 
Guatemala, Honduras, Korea (Republic of), Mexico, Morocco, Nicaragua, 
Panama, Peru, or Singapore);
* * * * *

0
6. Section 252.225-7035 is amended by--
0
a. Removing the clause date ``(JUN 2012)'' and adding ``(NOV 2012)'' in 
its place;
0
b. Adding the paragraph designation ``(a)'' to the ``Definitions'' 
paragraph;
0
c. Revising newly designated paragraph (a) and paragraphs (b) and (c); 
and
0
d. Revising alternates I, II, IV, and V.
    The revisions read as follows:

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

* * * * *
    (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,'' ``Panamanian 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--Free Trade 
Agreements--Balance of Payments Program clause of this solicitation.
    (b) Evaluation. The Government--
    (1) Will evaluate offers in accordance with the policies and 
procedures of Part 225 of the Defense Federal Acquisition Regulation 
Supplement; and
    (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, Moroccan end 
products, Panamanian end products, or Peruvian end products without 
regard to the restrictions of the Buy American or the Balance of 
Payments Program.
    (c) Certifications and identification of country of origin. (1) For 
all line items subject to the Buy American--Free Trade Agreements--
Balance of Payments Program clause of this solicitation, the offeror 
certifies that--
    (i) Each end product, except the end products listed in paragraph 
(c)(2) of this provision, is a domestic end product; and
    (ii) Components of unknown origin are considered to have been 
mined, produced, or manufactured outside the United States or a 
qualifying country.

[[Page 68702]]

    (2) The offeror shall identify all end products that are not 
domestic end products.
    (i) The offeror certifies that the following supplies are 
qualifying country (except Australian or Canadian) end products:
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(Line Item Number)
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(Country of Origin)
    (ii) The offeror certifies that the following supplies are Free 
Trade Agreement country end products other than Bahrainian end 
products, Moroccan end products, Panamanian end products or Peruvian 
end products:
-----------------------------------------------------------------------

(Line Item Number)
-----------------------------------------------------------------------

(Country of Origin)
    (iii) The following supplies are other foreign end products, 
including end products manufactured in the United States that do not 
qualify as domestic end products, i.e., an end product that is not a 
COTS item and does not meet the component test in paragraph (ii) of the 
definition of ``domestic end product'':
-----------------------------------------------------------------------

(Line Item Number)
-----------------------------------------------------------------------

(Country of Origin (If known))
* * * * *
ALTERNATE I (NOV 2012)
    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,'' ``Panamanian end product,'' and ``Peruvian 
end products'' in paragraph (a) of the basic provision; substitute the 
phrase ``Canadian end products'' for the phrase ``Free Trade Agreement 
country end products other than Bahrainian end products, Moroccan end 
products, or Peruvian 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 (NOV 2012)
    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 country end products, SC/CASA state end 
products, or Free Trade Agreement country end products other than 
Bahrainian end products, Moroccan end products, Panamanian end 
products, or Peruvian end products without regard to the restrictions 
of the Buy American 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 IV (NOV 2012)
    As prescribed in 225.1101(10)(v), add a definition of ``Korean end 
product'' in paragraph (a) of the basic provision; substitute the 
phrase ``Free Trade Agreement country end products other than 
Bahrainian end products, Korean end products, Moroccan end products, 
Panamanian end products, or Peruvian end products'' for the phrase 
``Free Trade Agreement country end products other than Bahrainian end 
products, Moroccan end products, Panamanian end products, or Peruvian 
end products'' in paragraphs (b)(2) and (c)(2)(ii) of the basic 
provision.
ALTERNATE V (NOV 2012)
    As prescribed in 225.1101(10)(vi), 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. ``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,'' ``Korean end product,'' 
``Moroccan end product,'' ``Panamanian end product,'' ``Peruvian end 
product,'' ``qualifying country end product,'' ``South Caucasus/Central 
and South Asian (SC/CASA) state 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, SC/CASA state end 
products, or Free Trade Agreement end products other than Bahrainian 
end products, Korean end products, Moroccan end products, Panamanian 
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)
    (ii) The offeror certifies that the following supplies are Free 
Trade Agreement country end products other than Bahrainian end 
products, Korean end products, Moroccan end products, Panamanian end 
products, or Peruvian end products:
-----------------------------------------------------------------------

(Line Item Number)
-----------------------------------------------------------------------

(Country of Origin)
0
7. Section 252.225-7036 is amended by
0
a. Removing the clause date ``(JUN 2012)'' and adding ``(NOV 2012)'' in 
its place;
0
b. In paragraph (a), in the definition of ``Free Trade Agreement 
country,'' adding in alphabetical order the country of ``Panama,'';
0
c. In paragraph (a), adding in alphabetical order a definition for 
``Panamanian end product''; and
0
d. Revising paragraph (c) and ALTERNATE II, IV, and V.
    The additions and revisions read as follows:

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

* * * * *
    (a) * * *
    ``Panamanian end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of Panama; 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 
Panama 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

[[Page 68703]]

products unless, in its offer, it specified delivery of qualifying 
country end products, Free Trade Agreement country end products other 
than Bahrainian end products, Moroccan end products, Panamanian end 
products, or Peruvian end products, or other foreign end products in 
the Buy American--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 or a 
Free Trade Agreement country end product other than a Bahrainian end 
product, a Moroccan end product, a Panamanian end product, or a 
Peruvian end product, the Contractor shall deliver a qualifying country 
end product, a Free Trade Agreement country end product other than a 
Bahrainian end product, a Moroccan end product, a Panamanian end 
product, or a Peruvian end product, or, at the Contractor's option, a 
domestic end product.
* * * * *
ALTERNATE II (NOV 2012)
    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) ``South Caucasus/Central and South Asian (SC/CASA) state'' 
means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    ``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, Panamanian end products, or Peruvian end products, or other 
foreign end products in the Buy American--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, a Panamanian 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, a Panamanian end product, or a Peruvian end product or, at the 
Contractor's option, a domestic end product.
* * * * *
ALTERNATE IV (NOV 2012)
    As prescribed in 225.1101(11)(i)(C), add the following definition 
to paragraph (a) and substitute the following paragraph (c) for 
paragraph (c) of the basic clause:
    (a) ``Korean end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of Korea; 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 
Korea (Republic of) 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, Free Trade Agreement country end products other 
than Bahrainian end products, Korean end products, Moroccan end 
products, Panamanian end products, or Peruvian end products, or other 
foreign end products in the Buy American--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 or a Free Trade Agreement country end 
product other than a Bahrainian end product, a Korean end product, a 
Moroccan end product, a Panamanian end product, or a Peruvian end 
product, the Contractor shall deliver a qualifying country end product, 
a Free Trade Agreement country end product other than a Bahrainian end 
product, a Korean end product, a Moroccan end product, a Panamanian end 
product, or a Peruvian end product, or, at the Contractor's option, a 
domestic end product.
ALTERNATE V (NOV 2012)
    As prescribed in 225.1101(11)(i)(C), add the following new 
definitions to paragraph (a) and substitute the following paragraph (c) 
for paragraph (c) of the basic clause:
    (a) ``Korean end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of Korea; 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 
Korea (Republic of) 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.
    ``South Caucasus/Central and South Asian (SC/CASA) state'' means 
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    ``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.

[[Page 68704]]

    (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, Korean end 
products, Moroccan end products, Panamanian end products, or Peruvian 
end products, or other foreign end products in the Buy American--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 Korean end product, a Moroccan end product, a Panamanian 
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 Korean end product, a Moroccan end product, a Panamanian end 
product, or a Peruvian end product or, at the Contractor's option, a 
domestic end product.

0
8. Section 252.225-7045 is amended by--
0
a. Removing the clause date ``(MAY 2012)'' and adding ``(NOV 2012)'' in 
its place; and
0
b. Revising paragraph (a)(2) of the definition for ``designated 
country'' to read as follows:

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

* * * * *
    (a) * * *
    ``Designated country'' means--
* * * * *
    (2) A Free Trade Agreement country (Australia, Bahrain, Canada, 
Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, 
Guatemala, Honduras, Korea (Republic of), Mexico, Morocco, Nicaragua, 
Panama, Peru, or Singapore);
* * * * *
[FR Doc. 2012-27749 Filed 11-15-12; 8:45 am]
BILLING CODE 5001-06-P
```