Rule2024-06006
Defense Federal Acquisition Regulation Supplement: Trade Agreements Thresholds (DFARS Case 2023-D023)
Primary source
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Published
March 26, 2024
Effective
March 26, 2024
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to incorporate revised thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the United States Trade Representative.
Full Text
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<title>Federal Register, Volume 89 Issue 59 (Tuesday, March 26, 2024)</title>
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[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Rules and Regulations]
[Pages 20871-20874]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06006]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 225 and 252
[Docket DARS-2024-0008]
RIN 0750-AL92
Defense Federal Acquisition Regulation Supplement: Trade
Agreements Thresholds (DFARS Case 2023-D023)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to incorporate revised
thresholds for application of the World Trade Organization Government
Procurement Agreement and the Free Trade Agreements, as determined by
the United States Trade Representative.
DATES: Effective March 26, 2024.
FOR FURTHER INFORMATION CONTACT: Ms. Kimberly Bass, 703-717-3446.
SUPPLEMENTARY INFORMATION:
I. Background
This rule adjusts thresholds for application of the World Trade
Organization (WTO) Government Procurement Agreement (GPA) and Free
Trade Agreements (FTAs) as determined by the United States Trade
Representative (USTR). The trade agreements thresholds are adjusted
every two years according to predetermined formulae set forth in the
agreements. The USTR has specified the following new thresholds in the
Federal Register (88 FR 85718), which are being implemented in this
rule:
------------------------------------------------------------------------
Supply Construction
contract contract
Trade agreement (equal to or (equal to or
exceeding) exceeding)
------------------------------------------------------------------------
WTO GPA................................. $174,000 $6,708,000
FTAs:
Australia........................... 102,280 6,708,000
Bahrain............................. 174,000 13,296,489
Dominican Republic-Central America- 102,280 6,708,000
United States Free Trade Agreement
(CAFTA-DR) (Costa Rica, Dominican
Republic, El Salvador, Guatemala,
Honduras, and Nicaragua)...........
Chile............................... 102,280 6,708,000
Colombia............................ 102,280 6,708,000
Korea............................... 100,000 6,708,000
Morocco............................. 174,000 6,708,000
Panama.............................. 174,000 6,708,000
Peru................................ 174,000 6,708,000
Singapore........................... 102,280 6,708,000
United States-Mexico-Canada Agreement 102,280 13,296,489
(USMCA)--Mexico........................
------------------------------------------------------------------------
[[Page 20872]]
For several FTAs (i.e., Australia, Chile, Colombia, Singapore,
CAFTA-DR, and Mexico), the thresholds for supply contracts have
increased from $92,319 to $102,280. This increase causes these
thresholds to exceed the Korea FTA threshold of $100,000, where in the
past they were below the Korea FTA threshold. As a result, the new
threshold amounts no longer align with the language used in the
prescriptions at DFARS 225.1101 for some of the alternate contract
clauses at DFARS 252.225-7036, Buy American--Free Trade Agreements--
Balance of Payments Program, as well as the text of the contract clause
at DFARS 252.225-7017, Photovoltaic Devices, and the solicitation
provision at DFARS 252.225-7018, Photovoltaic Devices--Certificate.
Therefore, the corresponding text in these locations has been adjusted
to accommodate the new thresholds.
II. Publication of This Final Rule for Public Comment Is Not Required
by Statute
The statute that applies to the publication of the Federal
Acquisition Regulation (FAR) is 41 U.S.C. 1707, Publication of Proposed
Regulations. Subsection (a)(1) of the statute requires that a
procurement policy, regulation, procedure, or form (including an
amendment or modification thereof) must be published for public comment
if it relates to the expenditure of appropriated funds, and has either
a significant effect beyond the internal operating procedures of the
agency issuing the policy, regulation, procedure, or form, or has a
significant cost or administrative impact on contractors or offerors.
This final rule is not required to be published for public comment,
because it only adjusts the thresholds according to predetermined
formulae to account for changes in economic conditions, thus
maintaining the status quo, without significant effect beyond the
internal operating procedures of the Government.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), and for Commercial Services
This final rule amends the DFARS to revise thresholds for
application of the WTO GPA and the FTA. However, this final rule does
not impose any new requirements, or impact the applicability of
solicitation provisions or contract clauses, for contracts at or below
the SAT, for commercial products including COTS items, or for
commercial services.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, as amended.
V. 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. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VI. Regulatory Flexibility Act
The Regulatory Flexibility Act does not apply to this rule because
this final rule does not constitute a significant DFARS revision within
the meaning of FAR 1.501-1 (48 CFR 1.501-1), and 41 U.S.C. 1707 does
not require publication for public comment.
VII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this
final rule, because the final rule affects the prescriptions for use of
the information collection requirements in the solicitation provision
at DFARS 252.225-7035, Buy American-Free Trade Agreements-Balance of
Payments Program Certificate, and the information collection
requirements in the solicitation provision at DFARS 252.225-7018,
Photovoltaic Devices--Certificate. However, these changes to the DFARS
do not impose additional information collection requirements to the
paperwork burden previously approved by the Office of Management and
Budget (OMB) under OMB Control Number 0704-0229, entitled ``DFARS Part
225, Foreign Acquisition and related clauses,'' because the threshold
changes are in line with inflation and maintain the status quo.
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 amended as follows:
0
1. The authority citation for 48 CFR parts 225 and 252 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 225--FOREIGN ACQUISITION
0
2. Amend section 225.1101--
0
a. By revising and republishing paragraphs (6) introductory text,
(10)(i) introductory text, and (10)(i)(A) and (B);
0
b. By revising paragraph (10)(i)(C);
0
c. By revising and republishing paragraphs (10)(i)(D), (E), and (F),
(10)(i)(G)(1), and (10)(i)(H)(1);
0
d. By revising paragraph (10)(i)(I)(1); and
0
e. By revising and republishing paragraphs (10)(i)(J)(1),
(10)(i)(K)(1), and (10)(i)(L)(1).
The revisions read as follows:
225.1101 Acquisition of supplies.
* * * * *
(6) Except as provided in paragraph (6)(iv) of this section, use
the basic or an alternate of the clause at 252.225-7021, Trade
Agreements, instead of the clause at FAR 52.225-5, Trade Agreements, in
solicitations and contracts, including solicitations and contracts
using FAR part 12 procedures for the acquisition of commercial products
and commercial services, if the World Trade Organization Government
Procurement Agreement applies, i.e., the acquisition is of end products
listed at 225.401-70, the value of the acquisition equals or exceeds
$174,000, and none of the exceptions at 25.401(a) applies.
* * * * *
(10)(i) Except as provided in paragraph (10)(ii) of this section,
use the basic or an alternate of the clause at 252.225-7036, Buy
American--Free Trade Agreements--Balance of Payments Program, instead
of the clause at FAR 52.225-3, Buy American--Free Trade Agreements--
Israeli Trade Act, in solicitations and contracts, including
solicitations and contracts using FAR part 12 procedures for the
acquisition of commercial products and commercial services, for the
items listed at 225.401-70, when the estimated value is less
[[Page 20873]]
than $174,000, unless an exception at FAR 25.401 or 225.401 applies.
(A) Use the basic clause in solicitations and contracts when the
estimated value equals or exceeds $100,000, but is less than $174,000,
except if the acquisition is of end products in support of operations
in Afghanistan.
(B) Use the alternate I clause in solicitations and contracts when
the estimated value is less than $102,280, except if the acquisition is
of end products in support of operations in Afghanistan.
(C) Use the alternate II clause in solicitations and contracts when
the estimated value equals or exceeds $100,000 but is less than
$174,000, and the acquisition is of end products in support of
operations in Afghanistan.
(D) Use the alternate III clause in solicitations and contracts
when the estimated value is less than $102,280, and the acquisition is
of end products in support of operations in Afghanistan.
(E) Use the alternate IV clause in solicitations and contracts when
the estimated value equals or exceeds $102,280 but is less than
$174,000, except if the acquisition is of end products in support of
operations in Afghanistan.
(F) Use the alternate V clause in solicitations and contracts when
the estimated value equals or exceeds $102,280 but is less than
$174,000 and the acquisition is of end products in support of
operations in Afghanistan.
(G) * * *
(1) The estimated value equals or exceeds $100,000 but is less than
$174,000; and
* * * * *
(H) * * *
(1) The estimated value is less than $102,280; and
* * * * *
(I) * * *
(1) The estimated value equals or exceeds $100,000, but is less
than $174,000;
* * * * *
(J) * * *
(1) The estimated value is less than $102,280;
* * * * *
(K) * * *
(1) The estimated value equals or exceeds $102,280 but is less than
$174,000; and
* * * * *
(L) * * *
(1) The estimated value equals or exceeds $102,280 but is less than
$174,000;
* * * * *
225.7017-3 [Amended]
0
3. Amend section 225.7017-3--
0
a. In paragraph (b) by removing ``$183,000'' and ``(see FAR 25.103(c)''
and adding ``$174,000'' and ``(see FAR 25.103(c))'' in their places,
respectively;
0
b. In paragraph (c)(1) by removing ``valued at $25,000 or more''; and
0
c. In paragraph (c)(2) by removing ``$183,000'' and adding ``$174,000''
in its place.
0
4. Amend section 225.7503--
0
a. By revising and republishing paragraphs (a) introductory text, (b)
introductory text, (b)(1) through (4), and (b)(5)(i);
0
b. By revising paragraph (b)(6)(i); and
0
c. By revising and republishing paragraphs (b)(7)(i) and (b)(8)(i).
The revisions read as follows:
225.7503 Contract clauses.
* * * * *
(a) Use the basic or an alternate of the clause at 252.225-7044,
Balance of Payments Program--Construction Material, in solicitations
and contracts for construction to be performed outside the United
States, including acquisitions of commercial products or commercial
components, with an estimated value greater than the simplified
acquisition threshold but less than $6,708,000.
* * * * *
(b) Use the basic or an alternate of the clause at 252.225-7045,
Balance of Payments Program--Construction Material Under Trade
Agreements, in solicitations and contracts for construction to be
performed outside the United States with an estimated value of
$6,708,000 or more, including acquisitions of commercial products or
commercial components.
(1) Use the basic clause in solicitations and contracts with an
estimated value of $13,296,489 or more, unless the acquisition is in
support of operations in Afghanistan.
(2) Use the alternate I clause in solicitations and contracts with
an estimated value of $6,708,000 or more, but less than $13,296,489
unless the acquisition is in support of operations in Afghanistan.
(3) Use the alternate II clause in solicitations and contracts with
an estimated value of $13,296,489 or more and is in support of
operations in Afghanistan.
(4) Use the alternate III clause in solicitations and contracts
with an estimated value of $6,708,000 or more, but less than
$13,296,489, and is in support of operations in Afghanistan.
(5) * * *
(i) The estimated value is $13,296,489 or more; and
* * * * *
(6) * * *
(i) The estimated value is $6,708,000 or more, but less than
$13,296,489; and
* * * * *
(7) * * *
(i) The estimated value is $13,296,489 or more;
* * * * *
(8) * * *
(i) The estimated value is $6,708,000 or more but less than
$13,296,489;
* * * * *
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.225-7017 [Amended]
0
5. Amend section 252.225-7017--
0
a. By removing the clause date ``(NOV 2023)'' and adding ``(MAR 2024)''
in its place;
0
b. In paragraph (c)(1) by removing ``$92,319'' and adding ``$100,000''
in its place;
0
c. In paragraph (c)(2) by removing ``$92,319 or more but less than
$100,000'' and adding ``$100,000 or more but less than $102,280'' in
its place; and
0
d. In paragraphs (c)(3) and (4) by removing ``$183,000'' and adding
``$174,000'' in its place.
0
6. Amend section 252.225-7018--
0
a. By removing the provision date ``(NOV 2023)'' and adding ``(MAR
2024)'' in its place; and
0
b. Revising and republishing paragraphs (b) through (d).
The revisions read as follows:
252.225-7018 Photovoltaic Devices--Certificate.
* * * * *
(b) Restrictions. The following restrictions apply, depending on
the estimated aggregate value of photovoltaic devices to be utilized
under a resultant contract:
(1) If more than the micro-purchase threshold but less than
$174,000, then the Government will not accept an offer specifying the
use of other foreign photovoltaic devices in paragraph (d)(2)(ii),
(d)(3)(ii), (d)(4)(ii), or (d)(5)(ii) of this provision, unless the
Offeror documents to the satisfaction of the Contracting Officer that
the price of the foreign photovoltaic device plus 50 percent is less
than the price of a comparable domestic photovoltaic device.
(2) If $174,000 or more, then the Government will consider only
offers that utilize photovoltaic devices that are
[[Page 20874]]
U.S.-made, qualifying country, or designated country photovoltaic
devices.
(c) Country in which a designated country photovoltaic device was
wholly manufactured or was substantially transformed. If the estimated
value of the photovoltaic devices to be utilized under a resultant
contract exceeds $102,280, the Offeror's certification that such
photovoltaic device (e.g., solar panel) is a designated country
photovoltaic device shall be consistent with country of origin
determinations by the U.S. Customs and Border Protection with regard to
importation of the same or similar photovoltaic devices into the United
States. If the Offeror is uncertain as to what the country of origin
would be determined to be by the U.S. Customs and Border Protection,
the Offeror shall request a determination from U.S. Customs and Border
Protection. (See <a href="https://www.cbp.gov/trade/rulings">https://www.cbp.gov/trade/rulings</a>.)
(d) Certification and identification of country of origin. [The
Offeror shall check the block and fill in the blank for one of the
following paragraphs, based on the estimated value and the country of
origin of photovoltaic devices to be utilized in performance of the
contract:]
(1) No photovoltaic devices will be utilized in performance of the
contract, or such photovoltaic devices have an estimated value that
does not exceed the micro-purchase threshold.
(2) If more than the micro-purchase threshold but less than
$100,000--
__(i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
__(ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a qualifying country
photovoltaic device [Offeror to specify country of origin___]; or
__(iii) The foreign (other than qualifying country) photovoltaic
devices to be utilized in performance of the contract are the product
of ___. [Offeror to specify country of origin, if known, and provide
documentation that the cost of a domestic photovoltaic device would be
unreasonable in comparison to the cost of the proposed foreign
photovoltaic device, i.e., that the price of the foreign photovoltaic
device plus 50 percent is less than the price of a comparable domestic
photovoltaic device.]
(3) If less than $100,000--
__(i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
__(ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a qualifying country
photovoltaic device [Offeror to specify country of origin___]; or
__(iii) The foreign photovoltaic devices to be utilized in
performance of the contract are the product of___. [Offeror to specify
country of origin, if known, and provide documentation that the cost of
a domestic photovoltaic device would be unreasonable in comparison to
the cost of the proposed foreign photovoltaic device, i.e., that the
price of the foreign photovoltaic device plus 50 percent is less than
the price of a comparable domestic photovoltaic device.]
(4) If $100,000 or more but less than $102,280--
__(i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
__(ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a Free Trade Agreement
country photovoltaic device (other than a Bahraini, Korean, Moroccan,
Panamanian, or Peruvian photovoltaic device) or a qualifying country
photovoltaic device [Offeror to specify country of origin___]; or
__(iii) The offered foreign photovoltaic devices (other than those
from countries listed in paragraph (d)(4)(ii) of this provision) are
the product of ___. [Offeror to specify country of origin, if known,
and provide documentation that the cost of a domestic photovoltaic
device would be unreasonable in comparison to the cost of the proposed
foreign photovoltaic device, i.e. that the price of the foreign
photovoltaic device plus 50 percent is less than the price of a
comparable domestic photovoltaic device.]
(5) If $100,000 or more but less than $174,000--
__(i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
__(ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a Free Trade Agreement
country photovoltaic device (other than a Bahraini, Moroccan,
Panamanian, or Peruvian photovoltaic device) or a qualifying country
photovoltaic device [Offeror to specify country of origin___]; or
__(iii) The offered foreign photovoltaic devices (other than those
from countries listed in paragraph (d)(5)(ii) of this provision) are
the product of ___. Offeror to specify country of origin, if known, and
provide documentation that the cost of a domestic photovoltaic device
would be unreasonable in comparison to the cost of the proposed foreign
photovoltaic device, i.e., that the price of the foreign photovoltaic
device plus 50 percent is less than the price of a comparable domestic
photovoltaic device.]
(6) If $174,000 or more, the Offeror certifies that each
photovoltaic device to be used in performance of the contract is--
__(i) A U.S.-made photovoltaic device; or
__(ii) A designated country photovoltaic device or a qualifying
country photovoltaic device. [Offeror to specify country of origin___.]
[FR Doc. 2024-06006 Filed 3-25-24; 8:45 am]
BILLING CODE 6001-FR-P
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