48370 Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 

List of Subjects in 48 CFR Parts 215 and 

242 

Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

Therefore, 48 CFR parts 215 and 242 

are proposed to be amended as follows: 

■ 1. The authority citation for parts 215 

and 242 continues to read as follows: 

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

chapter 1. 

PART 215—CONTRACTING BY 

NEGOTIATION 

■ 2. Amend section 215.403–3 by 

adding paragraph (a) to read as follows: 

§ 215.403–3 Requiring data other than 

certified cost or pricing data. 

* * * * * 

(a)(1) Contracting officers shall not 

determine the price of a contract to be 

fair and reasonable based solely on 

historical prices paid by the 

Government (see PGI 215.403–3(4)) (10 

U.S.C. 2306a(d)). 

(4) In accordance with 10 U.S.C. 

2306a(d) and in lieu of the factors for 

consideration listed in FAR 15.403– 

3(a)(4), a determination by the head of 

the contracting activity that it is in the 

best interest of the Government to make 

the award to an offeror that does not 

comply with a requirement to submit 

data other than certified cost or pricing 

data shall be based on consideration of 

pertinent factors, including the 

following: 

(A) The effort to obtain the data. 

(B) Availability of other sources of 

supply of the item or service. 

(C) The urgency or criticality of the 

Government’s need for the item or 

service. 

(D) Reasonableness of the price of the 

contract, subcontract, or modification of 

the contract or subcontract based on 

information available to the contracting 

officer. 

(E) Rationale or justification made by 

the offeror for not providing the 

requested data. 

(F) Risk to the Government if award 

is not made. 

* * * * * 

■ 3. Amend section 215.404–1 by 

revising paragraphs (b)(ii) and (v) 

introductory text to read as follows: 

§ 215.404–1 Proposal analysis techniques. 

* * * * * 

(b) * * * 

(ii) If the contracting officer 

determines that the information 

obtained through market research is 

insufficient to determine the 

reasonableness of price, the contracting 

officer shall consider information 

submitted by the offeror of recent 

purchase prices paid by the Government 

and commercial customers for the same 

or similar commercial items under 

comparable terms and conditions in 

establishing price reasonableness on a 

subsequent purchase if the contracting 

officer is satisfied that the prices 

previously paid remain a valid reference 

for comparison. Price reasonableness 

shall not be based solely on historical 

prices paid by the Government (see 

215.403–3(a)(1)). The contracting officer 

shall consider the totality of other 

relevant factors such as the time elapsed 

since the prior purchase and any 

differences in the quantities purchased 

(10 U.S.C. 2306a(b)(5)). 

* * * * * 

(v) When evaluating pricing data, the 

contracting officer shall consider 

materially differing terms and 

conditions, quantities, and market and 

economic factors (see PGI 215.404– 

1(b)(v)). For similar items, the 

contracting officer shall also consider 

material differences between the similar 

item and the item being procured (see 

FAR 15.404–1(b)(2)(ii)(B)). Material 

differences are those that could 

reasonably be expected to influence the 

contracting officer’s determination of 

price reasonableness. The contracting 

officer shall consider the following 

factors when evaluating the relevance of 

the information available: 

* * * * * 

PART 242—CONTRACT 

ADMINISTRATION AND AUDIT 

SERVICES 

■ 4. Revise section 242.1502 to read as 

follows: 

§ 242.1502 Policy. 

(g) Past performance evaluations in 

the Contractor Performance Assessment 

Reporting System— 

(i) Shall include an assessment of the 

contractor’s performance against, and 

efforts to achieve, the goals identified in 

its comprehensive small business 

subcontracting plan when the contract 

contains the clause at 252.219–7004, 

Small Business Subcontracting Plan 

(Test Program); and 

(ii) Shall, unless exempted by the 

head of the contracting activity, include 

a notation on contractors that have 

denied multiple requests for submission 

of data other than certified cost or 

pricing data over the preceding 3-year 

period, but nevertheless received an 

award (10 U.S.C. 2306a(d)(2)(B)(ii)). 

[FR Doc. 2021–18339 Filed 8–27–21; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 225 and 252 

[Docket DARS–2021–0012] 

RIN 0750–AK85 

Defense Federal Acquisition 

Regulation Supplement: Maximizing 

the Use of American-Made Goods 

(DFARS Case 2019–D045) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

implement an Executive order regarding 

maximizing the use of American-made 

goods, products, and materials. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

October 29, 2021, to be considered in 

the formation of a final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2019–D045, 

using any of the following methods: 

Æ Federal eRulemaking Portal: 

https://www.regulations.gov. Search for 

‘‘DFARS Case 2019–D045’’ in the search 

box and select ‘‘Search.’’ Select 

‘‘Comment’’ and follow the instructions 

to submit a comment. Please include 

your name, company name (if any), and 

‘‘DFARS Case 2019–D045’’ on any 

attached document. 

Æ Email: osd.dfars@mail.mil. Include 

DFARS Case 2019–D045 in the subject 

line of the message. 

Comments received generally will be 

posted without change to https://

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check https://

www.regulations.gov, approximately 

two to three days after submission to 

verify posting. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Kimberly Bass, telephone 571–372– 

6174. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is proposing to amend the 

DFARS to implement section 2(a)(i) of 

Executive Order (E.O.) 13881, 

Maximizing Use of American-Made 

Goods, Products, and Materials, which 

changes the percentages used to 

determine whether a product is 


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domestic or foreign under the Buy 

American statute (41 U.S.C. chapter 83). 

Section 2(a)(i) of E.O. 13881 is not 

inconsistent with E.O. 14005, Ensuring 

the Future Is Made in All of America by 

All of America’s Workers, which 

supersedes E.O. 13881 to the extent that 

it is inconsistent with E.O. 14005. E.O. 

13881 calls for more aggressive 

implementation of the Buy American 

statute to maximize the Government’s 

procurement of American-made goods, 

products, and materials. The Buy 

American statute requires the purchase 

of domestic products (both end products 

and construction materials), except for 

instances when the domestic product is 

not available, the domestic product is 

only available at an unreasonable cost, 

or it would not be in the public interest 

to buy the domestic product. 

E.O. 13881 supersedes E.O. 10582, 

Prescribing Procedures for Certain 

Determinations under the Buy American 

Act, to the extent that it is inconsistent 

with E.O. 13881, by establishing that 

under the Buy American statute a 

product is foreign if the cost of the 

foreign components used in such end 

product constitutes 45 percent or more 

of the cost of all products used in such 

end products, except that iron and steel 

products are foreign if the cost of foreign 

iron and steel equals or constitutes 5 

percent of the cost of all products used 

in iron and steel end products. 

In order to promote economic and 

national security, stimulate economic 

growth, and create jobs, this rule 

proposes to strengthen domestic 

preferences under the Buy American 

statute by changing how a domestic 

product is defined, while also 

maintaining the exception to the 

statutory requirement for qualifying 

countries. 

II. Discussion and Analysis 

The Buy American statute is 

implemented in Federal Acquisition 

Regulation (FAR) part 25. Revisions to 

the FAR to implement E.O. 13881 have 

been accomplished under FAR Case 

2019–016, published in the Federal 

Register on January 19, 2021 (86 FR 

6180). This rule proposes revisions to 

DFARS part 225 and the associated 

clauses to implement the DoD-unique 

requirements and conforming changes 

associated with implementation of E.O. 

13881. 

Revisions are proposed to the 

definitions of ‘‘domestic end product’’ 

and ‘‘domestic construction material.’’ 

Specifically, these definitions are each 

broken into two paragraphs to 

differentiate between end products and 

construction material that consist 

wholly or predominantly of iron or steel 

or a combination of both, and those that 

do not. Per the revised definition of 

‘‘domestic end product,’’ an end 

product that consists wholly or 

predominantly of iron or steel, or a 

combination of both, is only considered 

a domestic end product if the end 

product is manufactured in the United 

States, and the cost of iron and steel not 

produced in the United States, or a 

qualifying country, constitutes less than 

5 percent of the cost of all the materials 

used in the end product. For ‘‘domestic 

construction material,’’ if the 

construction material consists wholly or 

predominantly of iron or steel, or a 

combination of both, then the cost of 

iron and steel not produced in the 

United States (excluding fasteners) must 

constitute less than 5 percent of the cost 

of all the components used in the 

construction material. As explained in 

the definition of ‘‘foreign iron and steel’’ 

at FAR 25.003, ‘‘produced in the United 

States’’ means that all manufacturing 

processes of the iron or steel must take 

place in the United States, from the 

initial melting stage through the 

application of coatings, except 

metallurgical processes involving 

refinement of steel additives. 

The definition of a ‘‘domestic end 

product’’ is further revised to stipulate 

that if the end product does not consist 

wholly or predominantly of iron or 

steel, or a combination of both, then it 

is only considered a domestic end 

product if the end product is 

manufactured in the United States, and 

the cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent (an 

increase from 50 percent) of the cost of 

all its components. Similarly, for 

‘‘domestic construction material’’ that 

does not consist wholly or 

predominantly of iron or steel, or a 

combination of both, the cost of its 

components mined, produced, or 

manufactured in the United States must 

exceed 55 percent (an increase from 50 

percent) of the cost of all its 

components. In both cases, components 

of unknown origin are treated as foreign. 

Conforming changes are made 

throughout the DFARS to implement the 

revised definitions, to include revisions 

to the description of the two-part test for 

domestic end products at DFARS 

225.101. This rule also proposes 

definitions for the terms 

‘‘predominantly of iron or steel or a 

combination of both’’ and ‘‘steel,’’ 

which are used in the revised 

definitions of ‘‘domestic end product’’ 

and ‘‘domestic construction material.’’ 

Conforming changes are also made to 

redesignate paragraph numbers to 

reflect current drafting conventions in 

definitions for a number of clauses that 

are being updated. 

No changes are proposed in this rule 

to implement the E.O. 13881 change to 

the percentage factor used to determine 

whether the offered price of material of 

domestic origin is unreasonable or 

inconsistent with public interest. E.O. 

13881 increases the percentage factor 

from 6 percent to 20 percent for entities 

other than small businesses, and from 

12 percent to 30 percent for small 

businesses. However, DoD already uses 

a 50 percent factor for both large and 

small businesses, so no change is 

necessary for DoD to comply with the 

increased percentage factors in E.O. 

13881. In addition, E.O. 13881 does not 

remove any existing exemptions to the 

Buy American statute for products of 

qualifying countries; therefore, this rule 

does not include any proposed changes 

to the exemptions. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold and for Commercial Items, 

Including Commercially Available OffThe-Shelf Items 

This proposed rule does not add any 

new provisions or clauses, nor change 

the applicability of existing provisions 

or clauses to contracts at or below the 

simplified acquisition threshold and 

contracts for the acquisition of 

commercial items, including 

commercially available off-the-shelf 

items. 

IV. Expected Impact of the Rule 

The current FAR contract clauses 

implementing the Buy American statute 

apply to a narrow set of procurements. 

In addition, because the Federal 

Acquisition Regulatory Council retained 

the commercially available off-the-shelf 

(COTS) items exception for most COTS 

items in its implementation of the E.O. 

in the FAR, the heightened domestic 

content requirements will not be 

applicable to those procurements. (See 

the final rule for FAR Case 2019–016 

published at 86 FR 6180 on January 19, 

2021.) This proposed DFARS rule takes 

the same approach. 

Domestic industries supplying 

domestic end products are likely to 

benefit from a competitive advantage as 

a result of the FAR and DFARS 

implementation. Based on the E.O., it is 

unclear if the pool of qualified suppliers 

would be reduced, resulting in less 

competition and a possible increase in 

prices that the Government will pay to 

procure these products. At least three 

arguments point to the likelihood that 

any increase in burden on contractors 

would be small, if not de minimis: 


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(1) Familiarization costs should be 

low. 

(2) Some, if not many, contractors 

may already be able to meet the more 

stringent threshold. 

(3) Costs incurred by contractors who 

adjust their supply chains, so that their 

end products qualify as domestic, will 

enjoy a larger price preference that 

should help to offset these costs over 

time. 

Each of these arguments is explained 

below. 

First, DoD does not anticipate 

significant costs from contractor 

familiarization with the rule given the 

recent publication of the FAR final rule 

implementing E.O. 13881 and the 

history of rulemaking and E.O.s in 

general in this area. The basic 

mechanics of the Buy American statute 

(e.g., how and when the price 

preference is used to favor domestic end 

products, certifications required of 

offerors to demonstrate end products are 

domestic) continue to reflect processes 

that have been in place for decades and 

are not new to contractors. 

Second, some, if not many, 

contractors may already be able to 

comply with the lower foreign content 

requirement needed to meet the 

definition of domestic end product 

under E.O. 13881 and the proposed rule. 

Laws such as the SECURE Technology 

Act (Pub. L. 115–390), which requires a 

series of actions to strengthen the 

Federal infrastructure for managing 

supply chain risks, are placing 

significantly increased emphasis on 

Federal agencies and Federal 

Government contractors to identify and 

reduce risk in their supply chains. 

One way to reduce supply chain risk 

is to increase domestic sourcing of 

content. In addition, in the context of 

iron and steel, many laws already in 

place call for more stringent accounting 

of domestic sourcing of content. For 

example, the Recovery Act required that 

all construction material for a project for 

the construction, alteration, 

maintenance, or repair of a public 

building or a public work in the United 

States, consisting wholly or 

predominantly of iron or steel, had to be 

produced in the United States when 

using Recovery Act funds, to the extent 

consistent with trade agreements (see 

FAR 25.602–1, implementing section 

1605 of the Recovery Act). 

In addition, Federal contractors who 

also work on contracts funded under 

Federal grants may, in some cases, find 

that the steel, iron, and manufactured 

goods used in the project must be 

produced in the United States, as is the 

case for certain funding administered by 

the Federal Transit Administration for 

public transportation projects (see 49 

U.S.C. 5323(j)). 

Third, it is anticipated that some 

contractors’ products and construction 

materials may not meet the definition of 

domestic end product and construction 

material unless the contractors take 

steps to adjust their supply chains to 

increase the domestic content. Those 

contractors that make a business 

decision not to modify their supply 

chains will still be able to bid on DoD 

contracts but will no longer enjoy a 

price preference. 

Accordingly, it is likely that the 

Federal market for iron and steel has 

already completed significant retooling 

and could meet the requirements of E.O. 

13881 without too much additional 

effort. 

This rule proposes to amend clauses 

that implement the Buy American 

statute. There are 4 clauses affected by 

the changes in this rule: 

(1) 252.225–7001, Buy American and 

Balance of Payments Program (Basic and 

Alternate I). 

(2) 252.225–7036, Buy American— 

Free Trade Agreements—Balance of 

Payments Program (Basic and Alternates 

I–V). 

(3) 252.225–7044, Balance of 

Payments Program—Construction 

Material (Basic and Alternate I). 

(4) 252.225–7045, Balance of 

Payments Program—Construction 

Material (Basic and Alternates I–III). 

This rule changes the definitions of 

‘‘domestic end product’’ and ‘‘domestic 

construction material.’’ The rule also 

adds the definitions of ‘‘steel’’ and 

‘‘predominantly of iron or steel or a 

combination of both’’ in the clauses to 

conform the DFARS with the FAR 

implementation of E.O. 13881. 

According to the Federal Procurement 

Data System (FPDS) data for fiscal year 

(FY) 2017, FY 2018, and FY 2019 for 

new awards with a foreign place of 

performance for construction valued 

over the micro-purchase threshold and 

for awards for supplies, DoD awarded 

an average of 3,222 construction 

contracts with a foreign place of 

performance per year. In addition, DoD 

awarded an average of 332,607 supply 

contracts per year during FY 2017 

through FY 2019. 

In summary, the rule will strengthen 

domestic preferences under the Buy 

American statute and provide both large 

and small businesses the opportunity 

and incentive to deliver U.S. 

manufactured products from domestic 

suppliers. It is expected that this rule 

will benefit large and small U.S. 

manufacturers, including those of iron 

or steel. 

Therefore, it is estimated that any 

increase in implementation costs 

associated with this rule is de minimis. 

V. Executive Orders 12866 and 13563 

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 a significant 

regulatory action and, therefore, was 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. 

VI. Congressional Review Act 

As required by the Congressional 

Review Act (5 U.S.C. 801–808), before 

an interim or final rule takes effect, DoD 

will submit a copy of the interim or 

final rule with the form, Submission of 

Federal Rules under the Congressional 

Review Act, to the U.S. Senate, the U.S. 

House of Representatives, and the 

Comptroller General of the United 

States. A major rule under the 

Congressional Review Act cannot take 

effect until 60 days after it is published 

in the Federal Register. This rule is not 

anticipated to be a major rule under 5 

U.S.C. 804. 

VII. Regulatory Flexibility Act 

DoD does not expect this proposed 

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. However, an initial regulatory 

flexibility analysis has been performed 

and is summarized as follows: 

The rule proposes to amend the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) to implement 

section 2(a)(i) of Executive Order (E.O.) 

13881, Maximizing Use of AmericanMade Goods, Products, and Materials, 

and also makes conforming changes to 

the applicable clauses as a result of 

implementation of this E.O. in the 

Federal Acquisition Regulation (FAR). 

The objective of this rule is to 

strengthen domestic preferences under 

the Buy American statute, as required 

by E.O. 13881, by changing how a 

domestic product and domestic 

construction material are defined. 

Data was obtained from the Federal 

Procurement Data System (FPDS) on 

awards valued over the micro-purchase 

threshold in fiscal year (FY) 2017, FY 


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2018, and FY 2019 that had a foreign 

place of performance and were for 

construction. DoD awarded an average 

of 3,222 construction contracts with a 

foreign place of performance per year 

during FY 2017 through FY 2019. Of 

those construction contracts, 

approximately 65 were awarded to 32 

unique small entities per year. 

Data was also obtained from FPDS for 

FY 2017 through FY 2019 on awards 

valued over the micro-purchase 

threshold for supplies made in the 

United States. DoD awarded an average 

of 332,607 supply contracts per year 

during FY 2017 through FY 2019. Of 

those supply contracts, approximately 

154,422 supply contracts were awarded 

to 13,480 unique small entities per year. 

The rule will strengthen domestic 

preferences under the Buy American 

statute and provide small businesses the 

opportunity and incentive to deliver 

U.S. manufactured products from 

domestic suppliers. It is expected that 

this rule generally will benefit U.S. 

small business manufacturers, including 

those of iron or steel. Small business 

manufacturers who do not already meet 

the increased domestic content 

requirements of this proposed rule may 

need to adjust their supply chains. DoD 

does not have data on how many small 

business manufacturers may decide to 

make such adjustments. 

This rule does not include any new 

reporting, recordkeeping, or other 

compliance requirements for small 

businesses. This rule only changes the 

definitions of ‘‘domestic end product’’ 

and ‘‘domestic construction material’’ 

and adds the definitions of 

‘‘predominantly of iron or steel or a 

combination of both’’ and ‘‘steel’’ to 

conform the DFARS with the FAR 

revisions as a result of E.O. 13881 

implementation. Overall, the rule does 

not impose any additional compliance 

requirements on contractors or process 

procedures for the Government, other 

than to increase the percentages for use 

in the domestic content test applied to 

offers of manufactured end products. 

The rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

There are no known significant 

alternative approaches to the proposed 

rule that would meet the requirements 

of E.O. 13881. 

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 this 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 2019–D045), in 

correspondence. 

VII. Paperwork Reduction Act 

The rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Parts 225 and 

252 

Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

Therefore, 48 CFR parts 225 and 252 

are proposed to be amended as follows: 

■ 1. The authority citation for parts 225 

and 252 continues to read as follows: 

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

chapter 1. 

PART 225—FOREIGN ACQUISITION 

■ 2. Amend section 225.003 by: 

■ a. Revising the definition of 

‘‘Domestic end product’’; 

■ b. Removing the definition 

‘‘Qualifying country component and 

qualifying country end product’’; and 

■ c. Adding definitions for ‘‘Qualifying 

country component’’ and ‘‘Qualifying 

country end product’’ in alphabetical 

order. 

The revision and additions read as 

follows: 

225.003 Definitions. 

* * * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(B) The end product is a commercially 

available off-the-shelf (COTS) item; or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Qualifying country component means 

a component mined, produced, or 

manufactured in a qualifying country. 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 


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(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

* * * * * 

■ 3. Revise the subpart 225.1 heading to 

read as follows: 

SUBPART 225.1—BUY AMERICAN— 

SUPPLIES 

■ 4. Amend section 225.101 by revising 

paragraph (a)(ii) to read as follows: 

225.101 General. 

(a) * * * 

(ii)(A) Except for an end product that 

consists wholly or predominantly of 

iron or steel or a combination of both, 

the cost of its U.S. and qualifying 

country components exceeds 55 percent 

of the cost of all its components. This 

test is applied to end products only and 

not to individual components. 

(B) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, the cost of 

iron and steel not produced in the 

United States or a qualifying country 

must constitute less than 5 percent of 

the cost of all the components used in 

the end product. The cost of iron and 

steel not produced in the United States 

or a qualifying country includes but is 

not limited to the cost of iron or steel 

mill products (such as bar, billet, slab, 

wire, plate, or sheet), castings, or 

forgings, not produced in the United 

States or a qualifying country, utilized 

in the manufacture of the end product 

and a good faith estimate of the cost of 

all iron or steel components not 

produced in the United States or a 

qualifying country, excluding 

commercially available off-the-shelf 

(COTS) fasteners. The domestic content 

test of the Buy American statute has not 

been waived for acquisitions of COTS 

items in this category, except for COTS 

fasteners. 

* * * * * 

225.502 [Amended] 

■ 5. Amend section 225.502 by— 

■ a. In paragraph (c)(ii)(B), removing 

‘‘225.504(1)’’ and adding ‘‘PGI 

225.504(1)’’ in its place; 

■ b. In paragraph (c)(ii)(D), removing 

‘‘225.504(2)’’ and adding ‘‘PGI 

225.504(2)’’ in its place; 

■ c. In paragraph (c)(ii)(E)(1), removing 

‘‘225.504(3)’’ and adding ‘‘PGI 

225.504(3)’’ in its place; and 

■ d. In paragraph (c)(ii)(E)(2), removing 

‘‘225.504(4)’’ and adding ‘‘PGI 

225.504(4)’’ in its place. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 6. Amend section 252.225–7001 by— 

■ a. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place; 

■ b. In paragraph (a)— 

■ i. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ ii. Revising the definition of 

‘‘Domestic end product’’; 

■ iii. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ iv. Revising the definition of 

‘‘Qualifying country end product’’; and 

■ v. Adding, in alphabetical order, the 

definition of ‘‘Steel’’; and 

■ c. In Alternate I— 

■ i. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ B. Revising the definition of 

‘‘Domestic end product’’; 

■ C. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ D. Revising the definition of 

‘‘Qualifying country end product’’; 

■ E. In the definition of ‘‘South 

Caucasus/Central and South Asian (SC/ 

CASA) state end product’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; and 

■ F. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 

The revisions and additions read as 

follows: 

252.225–7001 Buy American and Balance 

of Payments Program. 

* * * * * 

(a) * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(B) The end product is a COTS item; 

or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 


khammond on DSKJM1Z7X2PROD with PROPOSALS
Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 48375 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate I. * * * 

(a) * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(B) The end product is a COTS item; 

or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

* * * * * 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

■ 7. Amend section 252.225–7036 by— 

■ a. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place. 

■ b. In paragraph (a)— 

■ i. In the definition of ‘‘Bahrainian end 

product’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2) 

respectively; 

■ ii. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2) 

respectively; 

■ iii. Revising the definition of 

‘‘Domestic end product’’; 

■ iv. In the definition of ‘‘Free Trade 

Agreement country’’, removing the 

semicolon and adding a period in its 

place; 

■ v. In the definitions of ‘‘Free Trade 

Agreement country end product’’, 

‘‘Moroccan end product’’, ‘‘Panamanian 

end product’’, and ‘‘Peruvian end 

product’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2) 

respectively; 

■ vi. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ vii. Revising the definition of 

‘‘Qualifying country end product’’; and 

■ viii. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 


khammond on DSKJM1Z7X2PROD with PROPOSALS
48376 Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 

■ c. In Alternate I— 

■ i. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definitions of ‘‘Bahrainian 

end product’’ and ‘‘Canadian end 

product’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2), 

respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. Revising the definition of 

‘‘Domestic end product’’; 

■ D. In the definition of ‘‘Free Trade 

Agreement country’’, removing the 

semicolon and adding a period in its 

place; 

■ E. In the definitions of ‘‘Free Trade 

Agreement country end product’’, 

‘‘Moroccan end product’’, ‘‘Panamanian 

end product’’, and ‘‘Peruvian end 

product’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2), 

respectively; 

■ F. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ G. Revising the definition of 

‘‘Qualifying country end product’’; and 

■ H. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 

■ d. In Alternate II— 

■ i. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definition of ‘‘Bahrainian 

end product’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. Revising the definitions of 

‘‘Domestic end product’’; 

■ D. In the definition of ‘‘Free Trade 

Agreement country’’, removing the 

semicolon and adding a period in its 

place; 

■ E. In the definitions of ‘‘Free Trade 

Agreement country end product’’, 

‘‘Moroccan end product’’, ‘‘Panamanian 

end product’’, and ‘‘Peruvian end 

product’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2), 

respectively; 

■ F. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ G. Revising the definition of 

‘‘Qualifying country end product’’; 

■ H. In the definition of ‘‘South 

Caucasus/Central and South Asian (SC/ 

CASA) state end product’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; and 

■ I. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 

■ e. In Alternate III— 

■ i. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definitions of ‘‘Bahrainian 

end product’’ and ‘‘Canadian end 

product’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2), 

respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. Revising the definition of 

‘‘Domestic end product’’; 

■ D. In the definition of ‘‘Free Trade 

Agreement country’’, removing the 

semicolon and adding a period in its 

place; 

■ E. In the definitions of ‘‘Free Trade 

Agreement country end product’’, 

‘‘Moroccan end product’’, ‘‘Panamanian 

end product’’, and ‘‘Peruvian end 

product’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2), 

respectively; 

■ F. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ G. Revising the definition of 

‘‘Qualifying country end product’’; 

■ H. In the definition of ‘‘South 

Caucasus/Central and South Asian (SC/ 

CASA) state end product’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; and 

■ I. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 

■ f. In Alternate IV— 

■ i. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definition of ‘‘Bahrainian 

end product’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. Revising the definition of 

‘‘Domestic end product’’; 

■ D. In the definition of ‘‘Free Trade 

Agreement country’’, removing the 

semicolon and adding a period in its 

place; 

■ E. In definitions of ‘‘Free Trade 

Agreement country end product’’, 

‘‘Korean end product’’, ‘‘Moroccan end 

product’’, ‘‘Panamanian end product’’, 

and ‘‘Peruvian end product’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; 

■ F. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ G. Revising the definition of 

‘‘Qualifying country end product’’; and 

■ H. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 

■ g. In Alternate V— 

■ i. Removing the clause date of ‘‘(DEC 

2017)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definition of ‘‘Bahrainian 

end product’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. Revising the definition of 

‘‘Domestic end product’’; 

■ D. In the definition of ‘‘Free Trade 

Agreement country’’, removing the 

semicolon and adding a period in its 

place; 

■ E. In the definitions of ‘‘Free Trade 

Agreement country end product’’, 

‘‘Korean end product’’, ‘‘Moroccan end 

product’’, ‘‘Panamanian end product’’, 

and ‘‘Peruvian end product’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; 

■ F. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ G. Revising the definition of 

‘‘Qualifying country end product’’; 

■ H. In the definition of ‘‘South 

Caucasus/Central and South Asian (SC/ 

CASA) state end product’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; and 

■ I. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 

The revisions and additions read as 

follows: 

252.225–7036 Buy American—Free Trade 

Agreements—Balance of Payments 

Program. 

* * * * * 

(a) * * * 

Domestic end product means— 


khammond on DSKJM1Z7X2PROD with PROPOSALS
Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 48377 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(B) The end product is a COTS item; 

or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate I. * * * 

(a) * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(C) The end product is a COTS item; 

or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 


khammond on DSKJM1Z7X2PROD with PROPOSALS
48378 Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate II. * * * 

(a) * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(B) The end product is a COTS item; 

or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

* * * * * 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate III. * * * 

(a) * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(C) The end product is a COTS item; 

or 


khammond on DSKJM1Z7X2PROD with PROPOSALS
Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 48379 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron and 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

* * * * * 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate IV. * * * 

(a) * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(B) The end product is a COTS item; 

or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 


khammond on DSKJM1Z7X2PROD with PROPOSALS
48380 Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 

Alternate V. * * * 

(a) * * * 

Domestic end product means— 

(1) For an end product that does not 

consist wholly or predominantly of iron 

or steel or a combination of both— 

(i) An unmanufactured end product 

mined or produced in the United States; 

or 

(ii) An end product manufactured in 

the United States if— 

(A) The cost of its qualifying country 

components and its components that are 

mined, produced, or manufactured in 

the United States exceeds 55 percent of 

the cost of all its components. The cost 

of components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Components of unknown origin 

are treated as foreign. Scrap generated, 

collected, and prepared for processing 

in the United States is considered 

domestic. A component is considered to 

have been mined, produced, or 

manufactured in the United States 

(regardless of its source in fact) if the 

end product in which it is incorporated 

is manufactured in the United States 

and the component is of a class or kind 

for which the Government has 

determined that— 

(1) Sufficient and reasonably available 

commercial quantities of a satisfactory 

quality are not mined, produced, or 

manufactured in the United States; or 

(2) It is inconsistent with the public 

interest to apply the restrictions of the 

Buy American statute; or 

(B) The end product is a COTS item; 

or 

(2) For an end product that consists 

wholly or predominantly of iron or steel 

or a combination of both, an end 

product manufactured in the United 

States, if the cost of iron and steel not 

produced in the United States or a 

qualifying country constitutes less than 

5 percent of the cost of all the 

components used in the end product 

(produced in the United States or a 

qualifying country means that all 

manufacturing processes of the iron or 

steel must take place in the United 

States or a qualifying country, except 

metallurgical processes involving 

refinement of steel additives). The cost 

of iron and steel not produced in the 

United States or a qualifying country 

includes but is not limited to the cost of 

iron or steel mill products (such as bar, 

billet, slab, wire, plate, or sheet), 

castings, or forgings, not produced in 

the United States or a qualifying 

country, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States or a qualifying country, excluding 

COTS fasteners. Iron or steel 

components of unknown origin are 

treated as foreign. If the end product 

contains multiple components, the cost 

of all the materials used in such end 

product is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Qualifying country end product 

means— 

(1) An unmanufactured end product 

mined or produced in a qualifying 

country; or 

(2) An end product manufactured in 

a qualifying country if— 

(i) The cost of the following types of 

components exceeds 50 percent of the 

cost of all its components: 

(A) Components mined, produced, or 

manufactured in a qualifying country. 

(B) Components mined, produced, or 

manufactured in the United States. 

(C) Components of foreign origin of a 

class or kind for which the Government 

has determined that sufficient and 

reasonably available commercial 

quantities of a satisfactory quality are 

not mined, produced, or manufactured 

in the United States. Components of 

unknown origin are treated as foreign; 

or 

(ii) The end product is a COTS item. 

* * * * * 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

■ 8. Amend section 252.225–7044 by— 

■ a. Removing the clause date of ‘‘(NOV 

2014)’’ and adding ‘‘(DATE)’’ in its 

place. 

■ b. In paragraph (a)— 

■ i. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ ii. In the definition of ‘‘Cost of 

components’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ iii. Revising the definition of 

‘‘Domestic construction material’’; and 

■ iv. Adding, in alphabetical order, the 

definitions of ‘‘Predominantly of iron or 

steel or a combination of both’’ and 

‘‘Steel’’. 

■ c. In Alternate I— 

■ i. Removing the clause date of ‘‘(NOV 

2014)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ B. In the definition of ‘‘Cost of 

components’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ C. Revising the definition of 

‘‘Domestic construction material’’; 

■ D. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ E. In the definition of ‘‘SC/CASA state 

construction material’’, redesignating 

paragraphs (i) and (ii) as paragraphs (1) 

and (2), respectively; and 

■ F. Adding, in alphabetical order, the 

definition of ‘‘Steel’’. 

The revisions and additions read as 

follows: 

§ 252.225–7044 Balance of Payments 

Program—Construction Material. 

* * * * * 

(a) * * * 

Domestic construction material 

means— 

(1) For construction material that does 

not consist wholly or predominantly of 

iron or steel or a combination of both— 

(i) An unmanufactured construction 

material mined or produced in the 

United States; or 

(ii) A construction material 

manufactured in the United States, if— 

(A) The cost of its components mined, 

produced, or manufactured in the 

United States exceeds 55 percent of the 

cost of all its components. Components 

of foreign origin of the same class or 

kind for which nonavailability 

determinations have been made are 

treated as domestic. Components of 

unknown origin are treated as foreign; 

or 

(B) The construction material is a 

COTS item; or 

(2) For construction material that 

consists wholly or predominantly of 

iron or steel or a combination of both, 


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Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 48381 

a construction material manufactured in 

the United States if the cost of iron and 

steel not produced in the United States 

(excluding fasteners) as estimated in 

good faith by the contractor, constitutes 

less than 5 percent of the cost of all the 

components used in such construction 

material (produced in the United States 

means that all manufacturing processes 

of the iron or steel must take place in 

the United States, except metallurgical 

processes involving refinement of steel 

additives). The cost of iron and steel not 

produced in the United States includes 

but is not limited to the cost of iron or 

steel mill products (such as bar, billet, 

slab, wire, plate, or sheet), castings, or 

forgings, not produced in the United 

States, utilized in the manufacture of 

the end product and a good faith 

estimate of the cost of all iron or steel 

components not produced in the United 

States, excluding COTS fasteners. Iron 

or steel components of unknown origin 

are treated as foreign. If the construction 

material contains multiple components, 

the cost of all the materials used in such 

construction material is calculated in 

accordance with the explanation of cost 

of components in paragraph (1)(ii)(A) of 

this definition. 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate I. * * * 

(a) * * * 

Domestic construction material 

means— 

(1) For construction material that does 

not consist wholly or predominantly of 

iron or steel or a combination of both— 

(i) An unmanufactured construction 

material mined or produced in the 

United States; or 

(ii) A construction material 

manufactured in the United States, if— 

(A) The cost of its components mined, 

produced, or manufactured in the 

United States exceeds 55 percent of the 

cost of all its components. Components 

of foreign origin of the same class or 

kind for which nonavailability 

determinations have been made are 

treated as domestic. Components of 

unknown origin are treated as foreign; 

or 

(B) The construction material is a 

COTS item; or 

(2) For construction material that 

consists wholly or predominantly of 

iron or steel or a combination of both, 

a construction material manufactured in 

the United States if the cost of iron or 

steel not produced in the United States 

(excluding fasteners) as estimated in 

good faith by the contractor, constitutes 

less than 5 percent of the cost of all the 

components used in such construction 

material (produced in the United States 

means that all manufacturing processes 

of the iron or steel must take place in 

the United States, except metallurgical 

processes involving refinement of steel 

additives). The cost of iron and steel not 

produced in the United States includes 

but is not limited to the cost of iron or 

steel mill products (such as bar, billet, 

slab, wire, plate, or sheet), castings, or 

forgings, not produced in the United 

States, utilized in the manufacture of 

the construction material and a good 

faith estimate of the cost of all iron or 

steel components not produced in the 

United States, excluding COTS 

fasteners. Iron or steel components of 

unknown origin are treated as foreign. If 

the construction material contains 

multiple components, the cost of all the 

materials used in such construction 

material is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

■ 9. Amend section 252.225–7045 by— 

■ a. Removing the clause date of ‘‘(AUG 

2019)’’ and adding ‘‘(DATE)’’ in its 

place. 

■ b. In paragraph (a)— 

■ i. In the definition of ‘‘Caribbean 

Basin country construction material’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; 

■ ii. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ iii. In the definition of ‘‘Cost of 

components’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ iv. In the definition of ‘‘Designated 

country’’, redesignating paragraphs (i), 

(ii), (iii), and (iv) as paragraphs (1), (2), 

(3), and (4), respectively; 

■ v. Revising the definition of 

‘‘Domestic construction material’’; 

■ vi. In the definitions of ‘‘Free Trade 

Agreement country construction 

material’’ and ‘‘Least developed country 

construction material’’, redesignating 

paragraphs (i) and (ii) as paragraphs (1) 

and (2), respectively; 

■ vii. Adding, in alphabetical order, the 

definitions of ‘‘Predominantly of iron or 

steel or a combination of both’’ and 

‘‘Steel’’; and 

■ viii. In the definition of ‘‘WTO GPA 

country construction material’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively. 

■ c. In Alternate I— 

■ i. Removing the clause date of ‘‘(AUG 

2019)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definitions of ‘‘Bahrainian or 

Mexican construction material’’ and 

‘‘Caribbean Basin country construction 

material’’, redesignating paragraphs (i) 

and (ii) as paragraphs (1) and (2), 

respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. In the definition of ‘‘Cost of 

components’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ D. In the definition of ‘‘Designated 

country’’, redesignating paragraphs (i), 

(ii), (iii), and (iv) as paragraphs (1), (2), 

(3), and (4), respectively; 

■ E. Revising the definition of 

‘‘Domestic construction material’’; 

■ F. In the definition of ‘‘Free Trade 

Agreement country construction 

material’’ and ‘‘Least developed country 

construction material’’, redesignating 

paragraphs (i) and (ii) as paragraphs (1) 

and (2), respectively; 

■ G. Adding, in alphabetical order, the 

definitions of ‘‘Predominantly of iron or 

steel or a combination of both’’ and 

‘‘Steel’’; and 

■ H. In the definition of ‘‘WTO GPA 

country construction material’’, 


khammond on DSKJM1Z7X2PROD with PROPOSALS
48382 Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively. 

■ d. In Alternate II— 

■ i. Removing the clause date of ‘‘(AUG 

2019)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definition of ‘‘Caribbean 

Basin country construction material’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. In the definition of ‘‘Cost of 

components’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ D. In the definition of ‘‘Designated 

country’’, redesignating paragraphs (i), 

(ii), (iii), and (iv) as paragraphs (1), (2), 

(3), and (4), respectively; 

■ E. Revising the definition of 

‘‘Domestic construction material’’; 

■ F. In the definitions of ‘‘Free Trade 

Agreement country construction 

material’’ and ‘‘Least developed country 

construction material’’, redesignating 

paragraphs (i) and (ii) as paragraphs (1) 

and (2), respectively; 

■ G. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ H. In the definition of ‘‘SC/CASA state 

construction material’’, redesignating 

paragraphs (i) and (ii) as paragraphs (1) 

and (2), respectively; 

■ I. Adding, in alphabetical order, the 

definition of ‘‘Steel’’; and 

■ J. In the definition of ‘‘WTO GPA 

country construction material’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively. 

■ e. In Alternate III— 

■ i. Removing the clause date of ‘‘(AUG 

2019)’’ and adding ‘‘(DATE)’’ in its 

place; and 

■ ii. In paragraph (a)— 

■ A. In the definition of ‘‘Caribbean 

Basin country construction material’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively; 

■ B. In the definition of ‘‘Commercially 

available off-the-shelf (COTS) item’’, 

redesignating paragraphs (i) 

introductory text, (i)(A), (B), and (C), 

and (ii) as paragraphs (1) introductory 

text, (1)(i), (ii), and (iii), and (2), 

respectively; 

■ C. In the definition of ‘‘Cost of 

components’’, redesignating paragraphs 

(i) and (ii) as paragraphs (1) and (2), 

respectively; 

■ D. In the definition of ‘‘Designated 

country’’, redesignating paragraphs (i), 

(ii), (iii), and (iv) as paragraphs (1), (2), 

(3), and (4), respectively; 

■ E. Revising the definition of 

‘‘Domestic construction material’’; 

■ F. In the definitions of ‘‘Free Trade 

Agreement country construction 

material’’ and ‘‘Least developed country 

construction material’’, redesignating 

paragraphs (i) and (ii) as paragraphs (1) 

and (2), respectively; 

■ G. Adding, in alphabetical order, the 

definition of ‘‘Predominantly of iron or 

steel or a combination of both’’; 

■ H. In the definition of ‘‘SC/CASA state 

construction material’’, redesignating 

paragraphs (i) and (ii) as paragraphs (1) 

and (2), respectively; 

■ I. Adding, in alphabetical order, the 

definition of ‘‘Steel’’; and 

■ J. In the definition of ‘‘WTO GPA 

country construction material’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively. 

The revisions and additions read as 

follows: 

§ 252.225–7045 Balance of Payments 

Program—Construction Material Under 

Trade Agreements. 

* * * * * 

(a) * * * 

Domestic construction material 

means— 

(1) For construction material that does 

not consist wholly or predominantly of 

iron or steel or a combination of both— 

(i) An unmanufactured construction 

material mined or produced in the 

United States; or 

(ii) A construction material 

manufactured in the United States, if— 

(A) The cost of its components mined, 

produced, or manufactured in the 

United States exceeds 55 percent of the 

cost of all its components. Components 

of foreign origin of the same class or 

kind for which nonavailability 

determinations have been made are 

treated as domestic. Components of 

unknown origin are treated as foreign; 

or 

(B) The construction material is a 

COTS item; or 

(2) For construction material that 

consists wholly or predominantly of 

iron or steel or a combination of both, 

a construction material manufactured in 

the United States if the cost of iron and 

steel not produced in the United States 

(excluding fasteners) as estimated in 

good faith by the contractor, constitutes 

less than 5 percent of the cost of all the 

components used in such construction 

material (produced in the United States 

means that all manufacturing processes 

of the iron or steel must take place in 

the United States, except metallurgical 

processes involving refinement of steel 

additives). The cost of iron and steel not 

produced in the United States includes 

but is not limited to the cost of iron or 

steel mill products (such as bar, billet, 

slab, wire, plate, or sheet), castings, or 

forgings, not produced in the United 

States, utilized in the manufacture of 

the construction material and a good 

faith estimate of the cost of all iron or 

steel components not produced in the 

United States, excluding COTS 

fasteners. Iron or steel components of 

unknown origin are treated as foreign. If 

the construction material contains 

multiple components, the cost of all the 

materials used in such construction 

material is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate I. * * * 

(a) * * * 

Domestic construction material 

means— 

(1) For construction material that does 

not consist wholly or predominantly of 

iron or steel or a combination of both— 

(i) An unmanufactured construction 

material mined or produced in the 

United States; or 

(ii) A construction material 

manufactured in the United States, if— 

(A) The cost of its components mined, 

produced, or manufactured in the 

United States exceeds 55 percent of the 

cost of all its components. Components 

of foreign origin of the same class or 

kind for which nonavailability 

determinations have been made are 

treated as domestic. Components of 

unknown origin are treated as foreign; 

or 

(B) The construction material is a 

COTS item; or 

(2) For construction material that 

consists wholly or predominantly of 

iron or steel or a combination of both, 

a construction material manufactured in 

the United States if the cost of iron and 


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Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 48383 

steel not produced in the United States 

(excluding fasteners) as estimated in 

good faith by the contractor, constitutes 

less than 5 percent of the cost of all the 

components used in such construction 

material (produced in the United States 

means that all manufacturing processes 

of the iron or steel must take place in 

the United States, except metallurgical 

processes involving refinement of steel 

additives). The cost of iron and steel not 

produced in the United States includes 

but is not limited to the cost of iron or 

steel mill products (such as bar, billet, 

slab, wire, plate, or sheet), castings, or 

forgings, not produced in the United 

States, utilized in the manufacture of 

the construction material and a good 

faith estimate of the cost of all iron or 

steel components not produced in the 

United States, excluding COTS 

fasteners. Iron or steel components of 

unknown origin are treated as foreign. If 

the construction material contains 

multiple components, the cost of all the 

materials used in such construction 

material is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate II. * * * 

(a) * * * 

Domestic construction material 

means— 

(1) For construction material that does 

not consist wholly or predominantly of 

iron or steel or a combination of both— 

(i) An unmanufactured construction 

material mined or produced in the 

United States; or 

(ii) A construction material 

manufactured in the United States, if— 

(A) The cost of its components mined, 

produced, or manufactured in the 

United States exceeds 55 percent of the 

cost of all its components. Components 

of foreign origin of the same class or 

kind for which nonavailability 

determinations have been made are 

treated as domestic. Components of 

unknown origin are treated as foreign; 

or 

(B) The construction material is a 

COTS item; or 

(2) For construction material that 

consists wholly or predominantly of 

iron or steel or a combination of both, 

a construction material manufactured in 

the United States if the cost of iron and 

steel not produced in the United States 

(excluding fasteners) as estimated in 

good faith by the contractor, constitutes 

less than 5 percent of the cost of all the 

components used in such construction 

material (produced in the United States 

means that all manufacturing processes 

of the iron or steel must take place in 

the United States, except metallurgical 

processes involving refinement of steel 

additives). The cost of iron and steel not 

produced in the United States includes 

but is not limited to the cost of iron or 

steel mill products (such as bar, billet, 

slab, wire, plate, or sheet), castings, or 

forgings, not produced in the United 

States, utilized in the manufacture of 

the construction material and a good 

faith estimate of the cost of all iron or 

steel components not produced in the 

United States, excluding COTS 

fasteners. Iron or steel components of 

unknown origin are treated as foreign. If 

the construction material contains 

multiple components, the cost of all the 

materials used in such construction 

material is calculated in accordance 

with the explanation of cost of 

components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 

2 percent carbon, and may include other 

elements. 

* * * * * 

Alternate III. * * * 

(a) * * * 

Domestic construction material 

means— 

(1) For construction material that does 

not consist wholly or predominantly of 

iron or steel or a combination of both— 

(i) An unmanufactured construction 

material mined or produced in the 

United States; or 

(ii) A construction material 

manufactured in the United States, if— 

(A) The cost of its components mined, 

produced, or manufactured in the 

United States exceeds 55 percent of the 

cost of all its components. Components 

of foreign origin of the same class or 

kind for which nonavailability 

determinations have been made are 

treated as domestic. Components of 

unknown origin are treated as foreign; 

or 

(B) The construction material is a 

COTS item; or 

(2) For construction material that 

consists wholly or predominantly of 

iron or steel or a combination of both, 

a construction material manufactured in 

the United States if the cost of iron and 

steel not produced in the United States 

(excluding fasteners) as estimated in 

good faith by the contractor, constitutes 

less than 5 percent of the cost of all the 

components used in such construction 

material (produced in the United States 

means that all manufacturing processes 

of the iron or steel must take place in 

the United States, except metallurgical 

processes involving refinement of steel 

additives). The cost of iron and steel not 

produced in the United States includes 

but is not limited to the cost of iron or 

steel mill products (such as bar, billet, 

slab, wire, plate, or sheet), castings, or 

forgings, not produced in the United 

States, utilized in the manufacture of 

the construction material and a good 

faith estimate of the cost of iron or steel 

components not produced in the United 

States, excluding COTS fasteners. Iron 

or steel components of unknown origin 

are treated as foreign. If the construction 

material contains multiple components, 

the cost of all the materials used in such 

construction material is calculated in 

accordance with the explanation of cost 

of components in paragraph (1)(ii)(A) of 

this definition. 

* * * * * 

Predominantly of iron or steel or a 

combination of both means that the cost 

of the iron and steel content exceeds 50 

percent of the total cost of all its 

components. The cost of iron and steel 

is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components 

excluding COTS fasteners. 

* * * * * 

Steel means an alloy that includes at 

least 50 percent iron, between 0.02 and 


khammond on DSKJM1Z7X2PROD with PROPOSALS
48384 Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Proposed Rules 

2 percent carbon, and may include other 

elements. 

* * * * * 

[FR Doc. 2021–18338 Filed 8–27–21; 8:45 am] 

BILLING CODE 5001–06–P 


khammond on DSKJM1Z7X2PROD with PROPOSALS