[Federal Register: May 24, 2004 (Volume 69, Number 100)]
[Proposed Rules]
[Page 29631-29633]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24my04-22]
[[Page 29631]]
-----------------------------------------------------------------------
Part II
Department of Defense
General Services Administration
National Aeronautics and Space Administration
-----------------------------------------------------------------------
48 CFR Parts 25
Federal Acquisition Regulation; Nonavailable Articles-Policy; Proposed
Rule
[[Page 29632]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 25
[FAR Case 2003-021]
RIN 9000-AJ95
Federal Acquisition Regulation; Nonavailable Articles-Policy
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to clarify the intent of the list
of items determined to be nonavailable for purposes of the Buy American
Act, and emphasize the need to conduct market research, appropriate to
the circumstances, for potential domestic sources.
DATES: Interested parties should submit comments in writing on or
before July 23, 2004, to be considered in the formulation of a final
rule.
ADDRESSES: Submit printed comments to General Services Administration,
FAR Secretariat (MVA), 1800 F Street, NW., Room 4035, ATTN: Laurie
Duarte, Washington, DC 20405. Submit electronic comments via the
Internet to the U.S. Government's rulemaking website at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov
, or to GSA's e-mailbox at mailto:farcase.2003-021@gsa.gov
Please submit comments only and cite FAR case 2003-021 in all
correspondence related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755
for information pertaining to status or publication schedules. For
clarification of content, contact Ms. Cecelia Davis, Procurement
Analyst, at (202) 219-0202. Please cite FAR case 2003-021.
SUPPLEMENTARY INFORMATION:
A. Background
This rule proposes to amend FAR Subpart 25.1 in order to clarify
the intent of the list of nonavailable items at FAR 25.104(a), and to
emphasize the need to conduct market research, appropriate to the
circumstances, for potential domestic sources, when acquiring an
article on the list.
The Buy American Act (41 U.S.C. 10a-10d) restricts the purchase of
articles for public use in the United States that are not mined,
produced, or manufactured in the United States. The Buy American Act
provides an exception for articles of a class or kind not mined,
produced, or manufactured in the United States in sufficient and
reasonably available commercial quantities and of a satisfactory
quality. FAR 25.103(b)(1) provides a determination that articles listed
at FAR 25.104(a) meet the conditions of this exception.
The established list of articles identified in FAR 25.104(a) is a
wide-ranging mix of natural resources, compounds, materials, and other
items of supply. Although some articles on the list have no known
domestic production sources (e.g., quartz crystals or vanilla beans),
many of the articles are known to have some domestic production
sources, but those sources have been determined in the past to be
inadequate to meet total U.S. Government and nongovernment demand.
Examples of such articles range from goat and kidskins (negligible
domestic production), to crude iodine (5 percent of U.S. demand), to
bismuth (not in excess of 50 percent of U.S. demand). The Councils
invite comment on the appropriateness of including items on the
nonavailability list for which there are domestic sources that can meet
50 percent of total U.S. demand.
The proposed rule adds introductory text at 25.103(b) to explain
that the nonavailability exception to the Buy American Act does not
mean that these items are completely nonavailable from U.S. sources,
but that they are of a class or kind that is not mined, produced or
manufactured in the United States in sufficient and reasonably
available commercial quantities and of a satisfactory quality.
The proposed rule also relocates the information on how to handle
potential deletions from the list (currently at 25.104(b)) to the same
section that discusses possible additions to the list (25.103(b)).
The current FAR allows the contracting officer to rely on the list,
unless the contracting officer learns before the time designated for
receipt of bids in sealed bidding or final offers in negotiation, that
an article on the list is available in sufficient and reasonably
available quantities of a satisfactory quality. The contracting officer
must then amend the solicitation if purchasing the article, or if
purchasing an end product that could contain such an article as a
component, and must specify in all new solicitations that the article
is available domestically and that offerors and contractors may not
treat foreign components of the same class or kind as domestic
components. In addition, the contracting officer must submit a copy of
supporting documentation to the appropriate council identified in
1.201-1 in accordance with agency procedures, for possible removal of
the article from the list.
Because market conditions may change, and items on the list may be
available in sufficient quantity and quality for a particular
acquisition, even though not in a quantity sufficient to meet total
U.S. demand, the proposed rule requires a more proactive role for the
agency. It requires the agency to conduct a level of market research
appropriate to the circumstances, including seeking of domestic
sources, before acquisition of an article on the list as an end
product, a significant component (valued at more than 50 percent of the
value of all the components), or a construction material. The proposed
rule does not require the contracting officer to do market research
seeking domestic sources for articles on the list of nonavailable
articles that are minor components of an end item.
The proposed rule also contains the requirements for publication of
the nonavailability list at least once every 5 years, with an
invitation to the public to submit unsolicited recommendations in the
interim, with sufficient documentation to permit evaluation.
A FAR notice 2004-N1, List of Nonavailable Articles Under the Buy
American Act, requesting public comment on the domestic availability of
items on the list has recently been published in the Federal Register
at 69 FR 28104, May 18, 2004.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Councils do 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.,
because it is a clarification of existing policies, except for
requiring a more proactive approach to market research by the
Government. An Initial Regulatory Flexibility Analysis has, therefore,
not been performed. We invite comments from small businesses and other
interested parties. The Councils will
[[Page 29633]]
consider comments from small entities concerning the affected FAR part
in accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 601, et seq. (FAR case
2003-021), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose information collection requirements
that require the approval of the Office of Management and Budget under
44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 25
Government procurement.
Dated: May 13, 2004.
Laura Auletta,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA propose amending 48 CFR part 25 as
set forth below:
1. The authority citation for 48 CFR part 25 is revised to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 25--FOREIGN ACQUISITION
2. Amend section 25.103 by revising paragraph (b) to read as
follows:
25.103 Exceptions.
* * * * *
(b) Nonavailability. The Buy American Act does not apply with
respect to articles, materials, or supplies if articles, materials, or
supplies of the class or kind to be acquired, either as end items or
components, are not mined, produced, or manufactured in the United
States in sufficient and reasonably available commercial quantities and
of a satisfactory quality.
(1) Class determinations. (i) A nonavailability determination has
been made for the articles listed in 25.104. This determination does
not necessarily mean that there is no domestic source for the listed
items, but that domestic sources can only meet 50 percent or less of
total U.S. Government and nongovernment demand.
(ii) Before acquisition of an article on the list, the procuring
agency is responsible to conduct market research appropriate to the
circumstances, including seeking of domestic sources. This applies to
acquisition of an article as--
(A) An end product; or
(B) A significant component (valued at more than 50 percent of the
value of all the components).
(iii) The determination in paragraph (b)(1)(i) of this section does
not apply if the contracting officer learns at any time before the time
designated for receipt of bids in sealed bidding or final offers in
negotiation that an article on the list is available domestically in
sufficient and reasonably available commercial quantities of a
satisfactory quality to meet the requirements of the solicitation. The
contracting officer must--
(A) Ensure that the appropriate Buy American Act provision and
clause are included in the solicitation (see 25.1101(a), 25.1101(b), or
25.1102);
(B) Specify in the solicitation that the article is available
domestically and that offerors and contractors may not treat foreign
components of the same class or kind as domestic components; and
(C) Submit a copy of supporting documentation to the appropriate
council identified in 1.201-1 in accordance with agency procedures, for
possible removal of the article from the list.
(2) Individual determinations. (i) The head of the contracting
activity may make a determination that an article, material, or supply
is not mined, produced, or manufactured in the United States in
sufficient and reasonably available commercial quantities of a
satisfactory quality.
(ii) If the contracting officer considers that the nonavailability
of an article is likely to affect future acquisitions, the contracting
officer may submit a copy of the determination and supporting
documentation to the appropriate council identified in 1.201-1 in
accordance with agency procedures, for possible addition to the list in
25.104.
(3) A written determination is not required if all of the following
conditions are present:
(i) The acquisition was conducted through use of full and open
competition.
(ii) The acquisition was synopsized in accordance with 5.201.
(iii) No offer for a domestic end product was received.
* * * * *
3. Amend section 25.104 in paragraph (a) by removing ``25.103(b)''
and adding ``25.103(b)(1)(i)'' in its place; and revising paragraph (b)
to read as follows:
25.104 Nonavailable articles.
* * * * *
(b) This list will be published in the Federal Register for public
comment no less frequently than once every five years. Unsolicited
recommendations for deletions from this list may be submitted at any
time, and should provide sufficient data and rationale to permit
evaluation (see FAR 1.502).
25.202 [Amended]
4. Amend section 25.202 in the last sentence of paragraph (a)(2) by
removing ``25.104(b)'' and adding ``25.103(b)(1)'' in its place.
[FR Doc. 04-11596 Filed 5-21-04; 8:45 am]