[Federal Register Volume 77, Number 178 (Thursday, September 13, 2012)]
[Rules and Regulations]
[Pages 56739-56740]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-22574]
[[Page 56739]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 4, 25 and 52
[FAC 2005-61; FAR Case 2012-004; Item I; Docket 2012-0004, Sequence 1]
RIN 9000-AM18
Federal Acquisition Regulation; United States-Korea Free Trade
Agreement
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are adopting as final, without change, an
interim rule amending the Federal Acquisition Regulation (FAR) to
implement the United States-Korea Free Trade Agreement. The Republic of
Korea is already party to the World Trade Organization Government
Procurement Agreement, but this trade agreement implements a lower
procurement threshold.
DATES: Effective Date: September 13, 2012.
FOR FURTHER INFORMATION CONTACT: Ms. Cecelia L. Davis, Procurement
Analyst, at 202-219-0202 for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat at 202-501-4755. Please cite FAC 2005-61, FAR Case 2012-
004.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published an interim rule in the Federal
Register on March 7, 2012 (77 FR 13952), to implement the Free Trade
Agreement with the Republic of Korea, which took effect on March 15,
2012. The comment period closed on May 7, 2012. Three respondents
submitted comments on the interim rule.
The interim rule added the Republic of Korea to the definition of
``Free Trade Agreement country'' in multiple locations in the FAR. The
Republic of Korea was already listed as a designated country because it
is party to the WTO GPA. The excluded services for the Korea FTA are
the same as for the WTO GPA. By implementation of this Korea FTA,
eligible goods and services from Korea are now covered when valued at
or above $100,000, rather than at or above the WTO GPA threshold of
$202,000. The threshold for the Korea FTA for construction is the same
as the threshold for the WTO GPA for construction.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the comments in the
development of the final rule. A discussion of the comments is provided
as follows:
A. Summary of Significant Changes
The Councils have adopted the interim rule as final without change.
B. Analysis of Public Comments
1. Impact on U.S. Businesses and Economy
Comment: One respondent expressed agreement that the United States
has the responsibility to do business with Free Trade Agreement
countries, but was concerned that lowering the trade agreements
threshold from $202,000 to $100,000 for goods and services from the
Republic of Korea will damage the small American business owners'
chances to compete, because of lower minimum wage in Korea. The
respondent was also concerned that lowering the threshold will increase
the national deficit. This respondent also stated that the rule will
benefit U.S. big business owners to the detriment of small American
business owners.
Response: DoD, GSA, and NASA issued this final rule because it
implements a statute (United States-Korea Free Trade Agreement
Implementation Act, Pub. L. 112-41, enacted on October 21, 2011). The
Councils do not have discretion to set trade agreement thresholds.
However, as discussed in the section on Regulatory Flexibility, the
lowering of the threshold from $202,000 to $100,0000 only applies to
the supplies and services covered by the Korea Free Trade Agreement.
For DoD, it only covers the non-defense items listed at Defense Federal
Acquisition Regulations System (DFARS) 225.401-70. Acquisitions that
are set aside or provide other form of preference for small businesses
are exempt from the Korea Free Trade Agreement. FAR 19.502-2 states
that acquisitions that do not exceed $150,000 (except as described in
paragraph (1) of the definition of ``simplified acquisition threshold''
at 2.101) are automatically reserved exclusively for small business
concerns, unless the contracting officer determines that there is not a
reasonable expectation of obtaining offers from two or more responsible
small business concerns.
2. Implementation in Contracts for Services
Comment: One respondent questioned how agencies will implement the
Korea Free Trade Agreement for services.
Response: This question is not unique to the Korea Free Trade
Agreement. The FAR does not provide provisions or clauses for the
specific implementation of any trade agreements. The FAR provisions and
clauses address only end products, because the provisions and clauses
are necessary to--
Waive the Buy American Act, which only applies to
supplies; and
Implement the purchase restriction at 25.403(c) for
acquisitions that exceed the World Trade Organization Government
Procurement Agreement (WTO GPA) threshold of $202,000. Below that
threshold, there is no purchase restriction on acquisition of services
from nondesignated countries.
The requirements of the Free Trade Agreements relate primarily to
acquisition procedures that are already specified in the FAR, e.g., FAR
5.203, Publicizing and response time; FAR 5.207, Preparation and
transmittal of synopses; and FAR 15.503, Notifications to unsuccessful
offerors (see FAR 25.408 for other applicable procedures).
3. Procuring Entities of the Central Level of the U.S. Government
Comment: One respondent requested that the final rule should
include the list of the entities of the U.S. central level of
Government, which have certain obligations with respect to Government
procurement of goods and services.
Response: The FAR has not included the list of Federal entities
subject to any other free trade agreement or the WTO GPA. Therefore,
the Councils do not consider inclusion of such a list in the FAR for
the Korea Free Trade Agreement to be necessary or appropriate.
4. Past Performance
Comment: One respondent expressed appreciation of the specific
reference to Article 17.5.2(b) of the Korea Free Trade Agreement in the
Federal Register preamble to the interim rule. Article 17.5.2.(b)
stipulates that an agency shall not impose a condition that, in order
for an offeror to be allowed to submit an offer or be awarded a
contract, the offeror has been previously awarded one or more contracts
by an agency of the United States Government or that the offeror has
prior work experience in the United States. The respondent suggested
that Office of Management and Budget
[[Page 56740]]
guidance on ``best practices for collecting and using current and past
performance information'' be updated by adding best practices related
to Articles 17.5.2(b) of the Korea Free Trade Agreement.
Response: Changes to the Office of Management and Budget guidance
are outside the scope of this rule. The Councils note, however, that
FAR 15.305(a)(2)(iv) already requires that, in the case of an offeror
without a record of relevant past performance or for whom information
on past performance is not available, the offeror may not be evaluated
favorably or unfavorably on past performance.
III. 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 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. This rule is not a major rule under 5
U.S.C. 804.
IV. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify 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., because Korea is already a
designated country under the WTO GPA. Although the rule opens up
Government procurement to the goods and services of Korea at or above
the threshold of $100,000, the Department of Defense only applies the
trade agreements to the non-defense items listed at DFARS 225.401-70,
and acquisitions that are set aside or provide other form of preference
for small businesses are exempt from coverage of the agreement. FAR
19.502-2 states that acquisitions that do not exceed $150,000 (except
as described in paragraph (1) of the definition of ``simplified
acquisition threshold'' at 2.101) are automatically reserved
exclusively for small business concerns, unless the contracting officer
determines that there is not a reasonable expectation of obtaining
offers from two or more responsible small business concerns.
V. Paperwork Reduction Act
The rule affects the certification and information collection
requirements in the provisions at FAR 52.212-3 and 52.225-4, 52.225-6,
and 52.225-11 currently approved under the Office of Management and
Budget Control Numbers 9000-0136, 9000-0130, 9000-0025, and 9000-0141
respectively, in accordance with the Paperwork Reduction Act (44 U.S.C.
chapter 35). The impact, however, is negligible because it is just a
question of which category offered goods from the Republic of Korea
would be listed under.
List of Subjects in 48 CFR Parts 4, 25, and 52
Government procurement.
Dated: September 7, 2012.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy, Office of Governmentwide Policy.
Interim Rule Adopted as Final Without Changes
0
Accordingly, the interim rule amending 48 CFR parts 4, 25, and 52,
which was published in the Federal Register at 77 FR 13952 on March 7,
2012, is adopted as a final rule without changes.
[FR Doc. 2012-22574 Filed 9-12-12; 8:45 am]
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