[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Rules and Regulations]
[Pages 67514-67518]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31466]




[[Page 67513]]

_______________________________________________________________________

Part VII

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 25 and 52



Federal Acquisition Regulation; Uruguay Round; Final Rule

Federal Register / Vol. 60, No. 250 / Friday, December 29, 1995 / 
Rules and Regulations

[[Page 67514]]


DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 90-36; FAR Case 95-304]
RIN 9000-AG80


Federal Acquisition Regulation; Uruguay Round

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

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on an interim rule to amend 
the Federal Acquisition Regulation (FAR) to implement the renegotiated 
General Agreement on Tariffs and Trade (GATT) Government Procurement 
Agreement (1996 Code) (Uruguay Round) which becomes effective January 
1, 1996. This regulatory action was not subject to Office of Management 
and Budget review under Executive Order 12866, dated September 30, 
1993.

DATES: Effective: January 1, 1996. Applicability: This regulation 
applies to solicitations issued on or after January 1, 1996. Comments 
Due: Comments on the interim rule should be submitted to the FAR 
Secretariat at the address shown below on or before February 27, 1996 
to be considered in the formulation of a final rule.

ADDRESSES: FAR Secretariat, Room 4037, GS Building, Washington, DC 
20405.

FOR FURTHER INFORMATION CONTACT:
Mr. Peter O'Such at (202) 501-1759 in reference to this FAR case. For 
general information, contact the FAR Secretariat, Room 4037, GS 
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-36, 
FAR case 95-304.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends the FAR to implement the renegotiated 
General Agreement on Tariffs and Trade (GATT) Government Procurement 
Agreement (1996 Code) (Uruguay Round) which becomes effective January 
1, 1996. This agreement is implemented in statute by the Uruguay Round 
Agreement Act, Public Law 103-465, which amends the Trade Agreements 
Act of 1979 (19 U.S.C. 2501-2582).

B. Regulatory Flexibility Act

    This interim rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule 
does not impose any new requirements on contractors, large or small. 
The interim rule primarily changes the list of designated foreign 
countries and extends applicability of the Trade Agreements Act to all 
agencies for supply and construction contracts over certain dollar 
thresholds. However, those contracts which are now subject to the Trade 
Agreements Act were already subject to the Memorandum of Understanding 
Between the United States of America and the European Community on 
Government Procurement. This change should have minimal impact on U.S. 
firms. The interim rule will not diminish existing preferences for 
small businesses, because purchases under small and small disadvantaged 
business preference programs are exempted from the Trade Agreements 
Act. An Initial Regulatory Flexibility Analysis has, therefore, not 
been performed. Comments from small entities concerning the affected 
subpart will be considered in accordance with Section 610 of the Act. 
Such comments must be submitted separately and cite FAC 90-36, FAR case 
95-304, in correspondence.

C. Paperwork Reduction Act

    This interim rule does not impose any new reporting or 
recordkeeping requirements which require Office of Management and 
Budget (OMB) approval under 44 U.S.C. 3501, et seq. Contractors, which 
previously were required to respond to the now deleted provision at 
52.225-16, Buy American Act--Supplies under European Community 
Agreement Certificate, will now be required to respond to the 
comparable provision at 52.225-8, Buy American Act--Trade Agreements--
Balance of Payments Program Certificate (OMB Control No. 9000-0046).

D. Determination to Issue an Interim Rule

    A determination has been made under authority of the Secretary of 
Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
in order to implement the renegotiated General Agreement on Tariffs and 
Trade (GATT) Government Procurement Agreement (1996 Code) (Uruguay 
Round) which becomes effective January 1, 1996. This agreement is 
implemented in statute by the Uruguay Round Agreement Act, Public Law 
103-465, which amends the Trade Agreements Act of 1979 (19 U.S.C. 2501-
2582). However, pursuant to Public Law 98-577 and FAR 1.501, public 
comments received in response to this interim rule will be considered 
in formulating the final rule.

List of Subjects in 48 CFR Parts 25 and 52

    Government procurement.

    Dated: December 22, 1995.
Edward C. Loeb,
Acting Director, Office of Federal Acquisition Policy.

Federal Acquisition Circular

Number 90-36
    Federal Acquisition Circular (FAC) 90-36 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
Administration.
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 90-36 is effective 
January 1, 1996. This regulation applies to solicitations issued on or 
after January 1, 1996.

    Dated: December 21, 1995.
Eleanor R. Spector,
Director, Defense Procurement.

    Dated: December 22, 1995.
Ida M. Ustad,
Associate Administrator, Office of Acquisition Policy, GSA.

    Dated: December 20, 1995.
Deidre Lee,
Associate Administrator for Procurement, NASA.

    Therefore, 48 CFR Parts 25 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR Parts 25 and 52 continues to 
read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 25--FOREIGN ACQUISITION


25.101  [Amended]

    2. At 25.101 in the definition of ``Instrumentality'' the phrase 
``European Economic Community'' is revised to read ``European Union''. 

[[Page 67515]]

    3. Section 25.104 is amended by revising paragraph (a) to read as 
follows:


25.104  Acquiring civil aircraft and related articles.

    (a) The U.S. Trade Representative, on February 19, 1980 (45 FR 
12349, February 25, 1980), waived applying the Buy American Act to the 
acquisition of civil aircraft and related articles of countries or 
instrumentalities that are parties to the Agreement on Civil Aircraft. 
The representative acted under the authority of section 303 of the 
Trade Agreements Act of 1979 (19 U.S.C. 2513). Countries and 
Instrumentalities that are parties to the agreement (as of January 1, 
1996) are Canada, the European Union (Austria, Belgium, Denmark, 
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the 
Netherlands, Portugal, Spain, Sweden and the United Kingdom), Japan, 
Norway, Romania, and Switzerland. The Office of the U.S. Trade 
Representative, Washington, DC 20506, can provide information on 
changes to the list of parties to the agreement made since January 1, 
1996.
* * * * *
    4. Section 25.109 is amended by revising paragraph (d), removing 
paragraphs (e) and (f), redesignating paragraph (g) as (e) and revising 
the introductory text and newly designated paragraph (e)(2); and 
amending newly designated paragraph (e)(1) by removing the word ``or''. 
The revised text reads as follows:


25.109  Solicitation provisions and contract clauses.

* * * * *
    (d) Except as provided in paragraph (e) of this section, the 
contracting officer shall insert the clause at 52.225-3, Buy American 
Act--Supplies, in solicitations and contracts for the acquisition of 
supplies, or for services involving the furnishing of supplies, for use 
within the United States.
    (e) Do not use the clause prescribed in paragraph (d) of this 
section when--
* * * * *
    (2) The acquisition is made under a trade agreement (see subpart 
25.4); or
* * * * *


25.202  [Amended]

    5. At 25.202(c) the reference to ``25.402(a) (3) and (4)'' is 
revised to read ``25.402(a) (1) and (3).
    6. At 25.205 paragraph (b) is revised to read as follows:


25.205  Solicitation provision and contract clause.

* * * * *
    (b)(1) For construction solicitations and contracts with an 
estimated acquisition value of $7,311,000 or more, insert the basic 
clause at 52.225-15, Buy American Act--Construction Materials under 
Trade Agreements Act and North American Free Trade Agreement.
    (2) For construction solicitations and contracts with an estimated 
value from $6,500,000 to $7,311,000, insert the clause with its 
Alternate I.
    7. Section 25.400 is revised to read as follows:


25.400  Scope of subpart.

    (a) This subpart provides policies and procedures for acquisitions 
subject to the Agreement on Government Procurement, as approved by 
Congress in the Trade Agreements Act of 1979 (19 U.S.C. 2501-2582), and 
as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), and 
other trade agreements including--
    (1) Acquisitions from countries designated under the Caribbean 
Basin Economic Recovery Act (19 U.S.C. 2701, et seq.);
    (2) Acquisitions involving offers of Israeli end products under the 
U.S.-Israel Free Trade Area Agreement, as approved by Congress in the 
United States-Israel Free Trade Area Implementation Act of 1985 (19 
U.S.C. 2112 note);
    (3) Acquisitions involving offers of Canadian or Mexican end 
products under the North American Free Trade Agreement (NAFTA), as 
approved by Congress in the NAFTA Implementation Act (Pub. L. 103-182, 
107 Stat. 2057); and
    (4) The Agreement on Civil Aircraft (19 U.S.C. 2513).
    (b) For application of the trade agreements which are unique to 
individual agencies (Department of Defense, National Aeronautics and 
Space Administration, Department of Energy (Power Marketing 
Administration), Department of the Interior (Bureau of Reclamation) and 
Department of Transportation (Federal Aviation Administration), see 
agency regulations.
    8. Section 25.401 is amended by revising the definitions for 
``Canadian end product,'' ``Caribbean Basin country end product'' 
introductory text and paragraphs (a) and (b), ``Designated country,'' 
``Designated country end product,'' and ``Mexican end product,''; 
definitions for ``European Community (EC) construction material,'' ``EC 
country,'' and ``EC end product,'' are removed; and a definition for 
``Designated country construction material,'' is added to read as 
follows:


25.401  Definitions.

* * * * *
    Canadian end product, as used in this subpart, means an article 
that (a) is wholly the growth, product, or manufacture of Canada, or 
(b) in the case of an article which consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in Canada into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was transformed. The term refers to a 
product offered for purchase under a supply contract, but for purposes 
of calculating the value of the end product includes services (except 
transportation services) incidental to its supply; provided, that the 
value of those incidental services does not exceed that of the product 
itself.
* * * * *
    Caribbean Basin country end product, as used in this subpart, means 
an article that (a) is wholly the growth, product, or manufacture of 
the Caribbean Basin country, or (b) in the case of an article which 
consists in whole or in part of materials from another country or 
instrumentality, has been substantially transformed into a new and 
different article of commerce with a name, character, or use distinct 
from that of the article or articles from which it was so transformed. 
The term refers to a product offered for purchase under a supply 
contract, but for purposes of calculating the value of the end product 
includes services (except transportation services) incidental to its 
supply; provided, that the value of those incidental services does not 
exceed that of the product itself. The term excludes products that are 
excluded from duty-free treatment for Caribbean countries under 19 
U.S.C. 2703(b), which presently are--
* * * * *
    Designated country, as used in this subpart, means a country or 
instrumentality designated under the Trade Agreements Act of 1979 and 
listed below:


Aruba                                Japan                              
Austria                              Lesotho                            
Bangladesh                           Liechtenstein                      
Belgium                              Luxembourg                         
Benin                                Malawi                             
Bhutan                               Maldives                           
Botswana                             Mali                               
Burkina Faso                         Nepal                              
Burundi                              Netherlands                        
Canada                               Niger                              
Cape Verde                           Norway                             
Central African Republic             Portugal                           
Chad                                 Republic of Korea                  
Comoros                              Rwanda                             

[[Page 67516]]
                                                                        
Denmark                              Somalia                            
Finland                              Spain                              
France                               Sudan                              
Gambia                               Sweden                             
Germany                              Switzerland                        
Greece                               Tanzania U.R.                      
Guinea                               Uganda                             
Haiti                                United Kingdom                     
Ireland                              Western Samoa                      
Israel                               Yemen                              
Italy                                                                   
                                                                        



    Designated country construction material, as used in this subpart, 
means construction material that (a) is wholly the growth, product, or 
manufacture of a designated country, or (b) in the case of a 
construction material which consists in whole or in part of materials 
from another country or instrumentality, has been substantially 
transformed in a designated country into a new and different 
construction material distinct from the materials from which it was 
transformed.
    Designated country end product, as used in this subpart, means an 
article that (a) is wholly the growth, product, or manufacture of the 
designated country, or (b) in the case of an article which consists in 
whole or in part of materials from another country or instrumentality, 
has been substantially transformed into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was so transformed. The term refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes services 
(except transportation services) incidental to its supply; provided, 
that the value of those incidental services does not exceed that of the 
product itself.
* * * * *
    Mexican end product, as used in this subpart, means an article that 
(a) is wholly the growth, product, or manufacture of Mexico, or (b) in 
the case of an article which consists in whole or in part of materials 
from another country or instrumentality, has been substantially 
transformed in Mexico into a new and different article of commerce with 
a name, character, or use distinct from that of the article or articles 
from which it was transformed. The term refers to a product offered for 
purchase under a supply contract, but for purposes of calculating the 
value of the end product includes services (except transportation 
services) incidental to its supply; provided, that the value of those 
incidental services does not exceed that of the product itself.
    9. At 25.402 paragraphs (a) (1) through (3) and (c) are revised, 
(a)(4) is removed, and (a) (5) and (6) are redesignated as (a) (4) and 
(5). The revised text reads as follows:


25.402  Policy.

    (a)(1) Executive Order 12260 requires the U.S. Trade Representative 
to set the dollar threshold for application of the Trade Agreements 
Act. The current threshold is $190,000 for supply and services 
contracts and $7,311,000 for construction contracts. The thresholds 
will be published in the Federal Register and will be distributed 
through agency procedures on an expedited basis. When the value of the 
proposed acquisition of an eligible product is estimated to be at or 
over the dollar threshold, agencies shall evaluate offers for an 
eligible product without regard to the restrictions of the Buy American 
Act (see subpart 25.1) or the Balance of Payments Program (see subpart 
25.3). When the value of the proposed construction contract is 
estimated to be at or over the dollar threshold, agencies shall 
evaluate offers of designated country construction materials without 
regard to the restrictions of the Buy American Act (see subpart 25.2) 
or the Balance of Payments Program (see subpart 25.3). When the value 
of the proposed acquisition is estimated to be below the Trade 
Agreements Act threshold, the restrictions of the Buy American Act or 
the Balance of Payments Program shall be applied to foreign offers, 
except as noted in paragraphs (a)(2) and (a)(3) of this section (see 
25.105).
    (2) As required by Article 15 of the U.S.-Israel Free Trade Area 
Agreement, agencies other than the Department of Defense, Department of 
Energy, Department of Transportation, the Bureau of Reclamation of the 
Department of the Interior, the Federal Housing Finance Board, and the 
Office of Thrift Supervision shall evaluate offers of Israeli end 
products at or above $50,000 in amount without regard to the 
restrictions of the Buy American Act (see subpart 25.1) or the Balance 
of Payments Program (see subpart 25.3).
    (3) As required by the North American Free Trade Agreement (NAFTA) 
Implementation Act (Pub. L. 103-182, 107 Stat. 2057), agencies shall 
evaluate offers of the following NAFTA country end products without 
regard to the restrictions of the Buy American Act (see subpart 25.1) 
or the Balance of Payments Program (see subpart 25.3):
    (i) NAFTA country construction materials under construction 
contracts with an estimated acquisition value of $6,500,000 or more.
    (ii) Canadian end products under supply contracts with an estimated 
value above $25,000 and Mexican end products under supply contracts 
with an estimated value of $50,000 or more.
* * * * *
    (c)(1) There shall be no acquisition of foreign end products 
subject to the Trade Agreements Act unless the foreign end products are 
eligible products, except as provided in paragraphs (c)(2) and (c)(3) 
of this section.
    (2) The prohibition in paragraph (c)(1) of this section does not 
apply if offers of domestic end products or of eligible products are 
either not received or are insufficient to fulfill the requirements.
    (3) A waiver may be granted under section 302(b)(2) of the Trade 
Agreements Act (19 U.S.C. 2512(b)(2)).
* * * * *
    10. Section 25.403 is revised to read as follows:


25.403  Exceptions.

    This subpart does not apply to--
    (a) Acquisitions below the dollar thresholds in 25.402(a) (1) 
through (3), respectively;
    (b) Purchases under small or small disadvantaged business 
preference programs;
    (c)(1) Purchases of arms, ammunition or war materials, or purchases 
indispensable for national security or for national defense purposes, 
by the Department of Defense, as provided in departmental regulations;
    (2) Purchases indispensable for national security or for national 
defense purposes, subject to policies established by the U.S. Trade 
Representative.
    (d) Research and development contracts;
    (e) Purchases of items for resale;
    (f) Purchases under subpart 8.6, Acquisition from Federal Prison 
Industries, Inc., and subpart 8.7, Acquisition from Nonprofit Agencies 
Employing People Who Are Blind or Severely Disabled; or
    (g) Purchases of products that are excluded from duty-free 
treatment for Caribbean countries under 19 U.S.C. 2703 (b); which 
presently are--
    (1) Textiles and apparel articles that are subject to textile 
agreements;
    (2) Footwear, handbags, luggage, flat goods, work gloves, and 
leather wearing apparel not designated as eligible articles for this 
purpose of the Generalized System of Preferences under Title V of the 
Trade Act of 1974;
    (3) Tuna, prepared or preserved in any manner in airtight 
containers;
    (4) Petroleum, or any product derived from petroleum; and
    (5) Watches and watch parts (including cases, bracelets and 
straps), 

[[Page 67517]]
of whatever type including, but not limited to, mechanical, quartz 
digital or quartz analog, if such watches or watch parts contain any 
material that is the product of any country to which the Tariff 
Schedule of the United States (TSUS) column two rates of duty apply.


25.406 and 25.407  [Removed]

    11. Sections 25.406 and 25.407 are removed and reserved.
    12. Section 25.408 is amended by revising the section heading and 
paragraphs (a)(2) and (4) to read as follows:


25.408  Solicitation provisions and contract clauses.

    (a) * * *
    (2) The clause at 52.225-9, Buy American Act--Trade Agreements--
Balance of Payments Program, in solicitations and contracts for 
supplies where the contracting officer has determined that the 
acquisition is subject to the Trade Agreements Act;
* * * * *
    (4) The clause at 52.225-21, Buy American Act--North American Free 
Trade Agreement (NAFTA) Implementation Act--Balance of Payments 
Program, in solicitations and contracts for supplies where the 
contracting officer has determined that the acquisition is not subject 
to the Trade Agreements Act but is subject to NAFTA.
* * * * *
    13. 25.1000 is amended by adding a new sentence at the end to read 
as follows:


25.1000  Scope of subpart.

    * * * For thresholds which are unique to individual agencies (e.g., 
Power Marketing Administration of the Department of Energy), see agency 
regulations.
    14. 25.1001 is revised to read as follows:


25.1001  Definitions.

    As used in this subpart--
    Sanctioned European Union (EU) construction means construction to 
be performed in a sanctioned member state of the EU and the contract is 
awarded by a contracting activity located in the United States or its 
territories.
    Sanctioned EU end product means an article that (a) is wholly the 
growth product or manufacture of a sanctioned member state of the EU or 
(b) in the case of an article which consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed into a new and different article of commerce 
with a name, character, or use distinct from that from which it was so 
transformed in a sanctioned member state of the EU. The term refers to 
a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes services 
(except transportation services) incidental to its supply; provided, 
that the value of these incidental services does not exceed that of the 
product itself.
    Sanctioned EU services means services to be performed in a 
sanctioned member state of the EU when the contract is awarded by a 
contracting activity located in the United States or its territories.
    Sanctioned member state of the EU means Austria, Belgium, Denmark, 
Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Sweden, 
and the United Kingdom.
    15. 25.1002 is amended by revising paragraphs (a)(1), (2), and (3) 
introductory text, removing (a)(3)(i), and redesignating (a)(3)(ii) as 
(a)(3)(i) and revising it, and redesignating (a)(3)(iii) as (a)(3)(ii); 
paragraph (c)(1) introductory text is amended by replacing ``EC'' with 
``EU.'' The revised text reads as follows:


25.1002  Trade sanctions.

    (a) * * *
    (1) Sanctioned EU end products with an estimated acquisition value 
less than $190,000.
    (2) Sanctioned EU construction with an estimated acquisition value 
less than $7,311,000.
    (3) Sanctioned EU services as follows:
    (i) Service contracts with an estimated acquisition value less than 
$190,000.
* * * * *
    16. 25.1003 is revised to read as follows:


25.1003  Contract clauses.

    Except as provided in 25.1002(b) and (c)--
    (a) Insert the clause at 52.225-18, European Union Sanctions for 
End Products, in solicitations and contracts for supplies with an 
estimated acquisition value less than $190,000.
    (b) Insert the clause at 52.225-19, European Union Sanction for 
Services, in solicitations and contracts for--
    (1) Services with an estimated acquisition value less than 
$190,000; and
    (2) All services listed in FAR 25.1002(a)(3)(ii).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.212-5  [Amended]

    17. 52.212-5 is amended by revising the date of the clause to read 
``(JAN 1996)''; removing and reserving paragraph (b)(12); and in 
(b)(13) and (b)(14) by removing the phrase ``Community Sanctions'' and 
inserting ``Union Sanctions'' in its place.
    18. 52.225-2 is amended by revising the introductory text, the 
clause date, and paragraph (b) to read as follows:


52.225-2  Waiver of Buy American Act for Civil Aircraft and Related 
Articles.

    As prescribed in 25.109(c), insert the following provision:
Waiver of Buy American Act for Civil Aircraft and Related Articles (Jan 
1996)
* * * * *
    (b) The U.S. Trade Representative has waived applying the Buy 
American Act to the acquisition of civil aircraft and related 
articles (as defined in paragraph (a) of this clause) of countries 
or instrumentaties that are parties to the Agreement on Trade in 
Civil Aircraft. As of January 1, 1996, those countries and 
instrumentalities include Canada, the European Union (Austria, 
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, 
Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United 
Kingdom), Japan, Norway, Romania, and Switzerland.
* * * * *
    19. 52.225-9 is amended as follows:
    a. by revising the clause date;
    b. in the definition of ``Caribbean Basin country end product,'' 
which follows paragraph (a), the second sentence is revised, the third 
sentence is removed, and the fourth sentence is amended to hyphenate 
the word ``duty-free'';
    c. in the definition of ``Designated country end product,'' the 
second sentence is revised, and the third sentence is removed;
    d. the definition ``Eligible product'' is added in alphabetical 
order;
    e. in the definition of ``NAFTA country end product,'' the second 
sentence is revised, and the third sentence is removed; and
    f. in paragraph (b) the fifth sentence is revised.
    The revised text reads as follows:


52.225-9  Buy American Act--Trade Agreements--Balance of Payments 
Program.

* * * * *
Buy American Act--Trade Agreements--Balance of Payments Program (Jan 
1996)
    (a) * * *
* * * * *
    Caribbean Basin country end product, * * * The term refers to a 
product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its 

[[Page 67518]]
supply; provided, that the value of those incidental services does not 
exceed that of the product itself. * * *
* * * * *
    Designated country end product, * * * The term refers to a 
product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its supply; 
provided, that the value of those incidental services does not 
exceed that of the product itself.
* * * * *
    Eligible product, as used in this clause, means a designated, 
North American Free Trade Agreement (NAFTA), or Caribbean Basin 
country end product.
* * * * *
    NAFTA country end product, * * * The term refers to a product 
offered for purchase under a supply contract, but for purposes of 
calculating the value of the end product includes services (except 
transportation services) incidental to its supply; provided, that 
the value of those incidental services does not exceed that of the 
product itself.
    (b) * * * Contractors may not supply a foreign end product for 
the line items subject to the Trade Agreements Act unless--
    (1) The foreign end product is an eligible product (see FAR 
25.401);
    (2) The Contracting Officer determines that offers of domestic 
end products or of eligible products are either not received or are 
insufficient to fulfill the Government's requirements; or
    (3) A waiver is granted under section 302 of the Trade 
Agreements Act of 1979 (see FAR 25.402(c)).
* * * * *
    20. Section 52.225-15 is amended:
    a. by revising the section and clause headings;
    b. revising ``25.205(b)'' in the introductory text to read 
``25.205(b)(1)'';
    c. revising the clause date;
    d. adding the definition ``Designated country construction 
material'' in alphabetical order;
    e. removing the definitions ``European Community construction 
material'' and ``EC country'';
    f. revising paragraph (b);
    g. Amending paragraph (c) by replacing ``EC'' with ``designated 
country'' and revising ``materialmen'' to read ``material men''; and
    h. adding Alternate I.
    The revised and added text reads as follows:


52.225-15  Buy American Act--Construction Materials under Trade 
Agreements Act and North American Free Trade Agreement.

* * * * *
Buy American Act--Construction Materials under Trade Agreements Act and 
North American Free Trade (Jan. 1996)
    (a) * * *
    Designated country construction material means a construction 
material that (a) is wholly the growth, product, or manufacture of a 
designated country (as defined at FAR 25.401), or (b) in the case of 
a construction material which consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in a designated country into a new and 
different construction material distinct from the materials from 
which it was transformed.
* * * * *
    (b) The Buy American Act (41 U.S.C. 10) provides that the 
Government give preference to domestic material. In addition, the 
Trade Agreements Act and the North American Free Trade Agreement 
(NAFTA) provide that designated country and NAFTA construction 
materials are exempted from application of the Buy American Act.
    Alternate I (Jan 1996). As prescribed in 25.205(b)(2), 
substitute the following paragraphs (b) and (c) in place of 
paragraphs (b) and (c) of the basic clause:
    (b) The Buy American Act (41 U.S.C. 10) provides that the 
Government give preference to domestic material. In addition, the 
North American Free Trade Agreement (NAFTA) provides that NAFTA 
construction materials are exempted from application of the Buy 
American Act.
    (c) The Contractor agrees that only domestic construction 
materials or NAFTA country construction materials will be used by 
the Contractor, subcontractors, material men and suppliers in the 
performance of this contract, except for other foreign construction 
materials, if any, listed in this contract.


52.225-16 and 52.225-17  [Removed]

    21. 52.225-16 and 52.225-17 are removed and reserved.
    22. 52.225-18 is amended:
    a. by revising the section and clause headings;
    b. by revising the clause date;
    c. in paragraph (a), in the definition ``Sanctioned European 
Community (EC) end product'' by revising ``European Community'' to read 
``European Union'', revising ``EC'' to read ``EU'' (3 times), revising 
the second sentence, and removing the third sentence;
    d. in the definition ``Sanctioned member state of the EC'' ``EC'' 
is revised to read ``EU'';
    e. in paragraph (b) by revising ``EC'' to read ``EU''. The revised 
text reads as follows:


52.225-18  European Union Sanction for End Products.

* * * * *
European Union Sanction for End Products (Jan 1996)
* * * * *
    (a) * * *
* * * * *
    Sanctioned European Union (EU) end product * * * The term refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its supply; 
provided, that the value of these incidental services does not 
exceed that of the product itself.
* * * * *
    23. Section 52.225-19 is amended by revising the section and clause 
headings, revising the clause date, in paragraph (a) by removing 
``Community (EC)'' and inserting in its place ``Union (EU)'', and 
revising the term ``EC'' to read ``EU'' in paragraph (b). The revised 
headings and date appear below.


52.225-19  European Union Sanction for Services.

* * * * *
European Union Sanction for Services (Jan 1996)
* * * * *
    24. 52.225-21 is amended by revising the clause date; in paragraph 
(a), in the definition ``NAFTA country end product,'' by revising the 
second sentence and removing the third sentence; and by removing 
paragraph (d) and redesignating paragraph ``(e)'' as ``(d)''. The 
revised text reads as follows:


52.225-21  Buy American Act--North American Free Trade Agreement 
Implementation Act--Balance of Payments Program.

* * * * *
Buy American Act--North American Free Trade Agreement Implementation 
Act--Balance of Payments Program (Jan 1996)
    (a) Definitions. * * *
* * * * *
    NAFTA country end product * * * The term refers to a product 
offered for purchase under a supply contract, but for purposes of 
calculating the value of the end product includes services (except 
transportation services) incidental to its supply; provided, that 
the value of those incidental services does not exceed that of the 
product itself.
* * * * *
[FR Doc. 95-31466 Filed 12-28-95; 8:45 am]
BILLING CODE 6820-EP-M