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###### Department of Defense

          - 48 CFR Parts 225 and 252
          - [DFARS Case 2004-D013]

# AGENCY:

Department of Defense (DoD).

# ACTION:

Final rule.

# SUMMARY:

DoD has adopted as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement new Free Trade Agreements with Australia and Morocco. The Free Trade Agreements were scheduled to become effective on or after January 1, 2005. However, the Morocco Free Trade Agreement has not yet entered into force and is therefore removed from this final rule.

# DATES:

*Effective Date:*                         December 9, 2005.                    

# FOR FURTHER INFORMATION CONTACT:

Ms. Amy Williams, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328; facsimile (703) 602-0350. Please cite DFARS Case 2004-D013.

# SUPPLEMENTARY INFORMATION:

## A. Background

                    DoD published an interim rule at 70 FR 2361 on January 13, 2005, to implement new Free Trade Agreements                           ( print page 73153)                        with Australia and Morocco, as approved by Congress in the United States-Australia Free Trade Agreement Implementation Act (Public Law 108-286) and the United States-Morocco Free Trade Agreement Implementation Act (Public Law 108-302). The Free Trade Agreements were scheduled to become effective on or after January 1, 2005. However, the United States Trade Representative has informed DoD that the Morocco Free Trade Agreement has not yet entered into force. Therefore, implementation of the Morocco Free Trade Agreement is excluded from this final rule. In addition, for consistency with the Federal Acquisition Regulation and other changes made by the interim rule, this final rule amends the definition of “eligible product” at 225.003 to include foreign construction material.                

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

## B. Regulatory Flexibility Act

                    DoD certifies that this final rule will not 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.*                     DoD applies the trade agreements to only those non-defense items listed at DFARS 225.401-70; and acquisitions that are set aside for small business concerns are exempt from application of the trade agreements.                

## C. Paperwork Reduction Act

This rule affects the certification and information collection requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, currently approved under Office of Management and Budget Control Number 0704-0229. The impact, however, is negligible.

# List of Subjects in 48 CFR Parts 225 and 252

      - Government procurement

Michele P. Peterson,

Editor, Defense Acquisition Regulations System.

Accordingly, the interim rule amending 48 CFR parts 225 and 252, which was published at 70 FR 2361 on January 13, 2005, is adopted as a final rule with the following changes:

1. The authority citation for 48 CFR parts 225 and 252 continues to read as follows:

Authority:41 U.S.C. 421 and 48 CFR Chapter 1.  

# PART 225—FOREIGN ACQUISITION

2. Section 225.003 is amended as follows: 

a. In paragraph (5)(i)(B), by removing “or”; 

b. By redesignating paragraph (5)(ii) as paragraph (5)(iii); and 

c. By adding a new paragraph (5)(ii) to read as follows: 

225.003 

* * * * *

(5) * * *

(ii) A foreign construction material that is not subject to discriminatory treatment, due to the applicability of a trade agreement to a particular acquisition; or

* * * * *

# PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 

252.212-7001 

3. Section 252.212-7001 is amended as follows: 

a. By revising the clause date to read “(DEC 2005)”; and 

b. In paragraph (b), in entry “252.225-7021”, by removing “(JUN 2005)” and adding in its place “(DEC 2005)”. 

252.225-7021 

4. Section 252.225-7021 is amended as follows: 

a. By revising the clause date to read “(DEC 2005)”; and 

b. In paragraph (a)(3)(ii), by removing “Morocco,”. 

5. Section 252.225-7045 is amended as follows: 

a. By revising the clause date to read “(DEC 2005)”; 

b. In paragraph (a), in the definition of “Designated country”, in paragraph (2), by removing “Morocco,”; and 

c. By revising Alternate I to read as follows: 

252.225-7045 

* * * * *

Alternate I (DEC 2005). As prescribed in 225.7503(b), delete the definitions of “designated country” and “designated country construction material” from the definitions in paragraph (a) of the basic clause, add the following definition of “Australian or Chilean construction material” to paragraph (a) of the basic clause, and substitute the following paragraphs (b) and (c) for paragraphs (b) and (c) of the basic clause:

*Australian or Chilean construction material*                             means a construction material that—                        

(1) Is wholly the growth, product, or manufacture of Australia or Chile; or

(2) In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in Australia or Chile into a new and different construction material distinct from the materials from which it was transformed.

(b) This clause implements the Balance of Payments Program by providing a preference for domestic construction material. In addition, the Contracting Officer has determined that the WTO GPA and all Free Trade Agreements except NAFTA apply to this acquisition. Therefore, the Balance of Payments Program restrictions are waived for WTO GPA country, Australian or Chilean, least developed country, or Caribbean Basin country construction material.

(c) The Contractor shall use only domestic, WTO GPA country, Australian or Chilean, least developed country, or Caribbean Basin country construction material in performing this contract, except for—

(1) Construction material valued at or below the simplified acquisition threshold in Part 2 of the Federal Acquisition Regulation; or

(2) The construction material or components listed by the Government as follows: 

*[Contracting Officer to list applicable excepted materials or indicate “none”]*

[FR Doc. 05-23722 Filed 12-8-05; 8:45 am]

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