Federal Acquisition Regulation: Maximizing Use of American-Made Goods, Products, and Materials, 56558-56569 [2020-20116]

Download as PDF 56558 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules publication schedules, contact the Regulatory Secretariat Division at 202– 501–4755 or GSARegSec@gsa.gov. Please cite FAR Case 2019–016. SUPPLEMENTARY INFORMATION: DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION I. Background 48 CFR Parts 12, 25, and 52 [FAR Case 2019–016; Docket No. FAR– 2019–0016, Sequence No. 1] RIN 9000–AN99 Federal Acquisition Regulation: Maximizing Use of American-Made Goods, Products, and Materials Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Proposed rule. AGENCY: DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement an Executive order (E.O.) addressing domestic preferences in Government procurement. DATES: Interested parties should submit written comments at the address shown below on or before November 13, 2020 to be considered in the formation of the final rule. ADDRESSES: Submit comments in response to FAR Case 2019–016 to https://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for ‘‘FAR Case 2019– 016’’. Select the link ‘‘Comment Now’’ that corresponds with ‘‘FAR Case 2019– 016.’’ Follow the instructions provided on the screen. Please include your name, company name (if any), and ‘‘FAR Case 2019–016’’ on your attached document. If your comment cannot be submitted using https:// www.regulations.gov, call or email the points of contact in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions. Instructions: Please submit comments only and cite ‘‘FAR Case 2019–016’’ in all correspondence related to this case. All comments received will be posted without change to https:// www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission to verify posting. FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement Analyst, at 202–969–7207 or zenaida.delgado@ gsa.gov for clarification of content. For information pertaining to status or khammond on DSKJM1Z7X2PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 Congress passed the Buy American Act during the Great Depression to foster American industry by protecting it from foreign competition for Federal procurement contracts. The Buy American Act is codified at 41 U.S.C. Chapter 83 as the Buy American statute and provides pricing preferences to offerors who certify their compliance with the domestic purchasing requirements stated in the Act. Specifically, it requires public agencies to procure articles, materials, and supplies that were mined, produced, or manufactured in the United States, substantially all from domestic components, subject to exceptions for nonavailability of domestic products, unreasonable cost of domestic products, and when it would not be in the public interest to buy domestic products. The key to understanding the Buy American statute, which is implemented in FAR part 25, is determining whether the solicited goods or ‘‘end products’’ or ‘‘construction material’’ are domestic, i.e., were mined, produced, or manufactured in the United States, substantially from components mined, produced, or manufactured in the United states. The analysis of whether a manufactured end product or construction material qualifies as domestic is done using a two-part test. 1. The end product or construction material must be manufactured in the United States. 2. More than 50 percent of all component parts (determined by cost of the components) must also be mined, produced, or manufactured in the United States. The factor of 50 percent in the existing FAR definition came from E.O. 10582, Prescribing Uniform Procedures for Certain Determinations under the Buy American Act, available via the internet at https://www.archives.gov/ federal-register/codification/executiveorder/10582.html. E.O. 10582 interpreted the statutory requirement that domestic products must be manufactured ‘‘substantially all’’ from domestic components as meaning in excess of 50 percent. If a product meets this two-part test, then it can be considered a ‘‘domestic end product’’ or ‘‘domestic construction material’’ under the Buy American statute. End products or construction material that do not PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 qualify as domestic under this test are treated as foreign. The Buy American statute is waived in situations where the United States has reciprocal trade agreements, including the World Trade Organization Government Procurement Agreement (WTO GPA). Generally, the dollar value of the acquisition determines which of the trade agreements applies. Exceptions to the applicability of the trade agreements are described in FAR subpart 25.4. The FAR clauses implementing the Trade Agreements Act allow the Government to purchase end items that are ‘‘substantially transformed’’ in countries that are parties to such trade agreements without regard to the source or cost of the components. On acquisitions under the WTO GPA, end products that are ‘‘substantially transformed’’ in the United States are considered ‘‘U.S.made end products’’ and they are not subject to the Buy American statute or E.O. 13881. On July 15, 2019, the President signed E.O. 13881, Maximizing Use of American-Made Goods, Products, and Materials (84 FR 34257, July 18, 2019). This E.O. changes FAR clauses implementing the Buy American statute by increasing the— 1. Domestic content requirements; and 2. Price preference for domestic products. Increased Domestic Content Requirements Under E.O. 13881, the domestic content requirement for iron and steel end products increases to 95 percent. For everything else, the domestic content requirement increases from 50 percent to exceeds 55 percent of the cost of all components. E.O. 13881 creates a new separate higher domestic content standard for iron and steel end products. This distinction does not currently appear in the FAR clauses implementing the Buy American statute. But it has been around for many years in domestic preference requirements governing certain federal grant programs, such as the Federal Transit Administration’s Buy America regulations applicable to grantees. DoD procurements are affected by the increased domestic content requirements of E.O. 13881; the changes will be implemented in the Defense Federal Acquisition Regulation Supplement (DFARS) through DFARS Case 2019–D045, Maximizing Use of American-Made Goods. E:\FR\FM\14SEP1.SGM 14SEP1 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules Increase Preference for Domestic Offers B. Definitions The Buy American statute does not prohibit the purchase of foreign end products or use of foreign construction material. Instead, it encourages the use of domestic end products and construction material by imposing a price preference for domestic end products and construction material. Under current Buy American regulations, large businesses receive a 6 percent price preference. Small businesses get a 12 percent price preference. For DoD procurements, the price preference for end products from both large and small businesses is 50 percent. The 6 percent price preference was originally established by E.O. 10582, which permitted the head of an executive agency to determine that a greater differential is appropriate. In October 1958, the Assistant Secretary of Defense (Supply and Logistics) and the Assistant Secretary of State agreed that a differential of 12 percent would be used for offers from small business (see Armed Services Procurement Regulation (ASPR), 1955 edition, Revision 45, 20 April 1959, Case 58–99). E.O. 13881 increases the price preference from 6 percent to 20 percent for large businesses and from 12 percent to 30 percent for small businesses. The E.O. does not impact the 50 percent preference for DoD procurements, because the DoD percentage exceeds the requirements of the E.O. 1. This rule proposes to amend the definitions of ‘‘domestic construction material’’ and ‘‘domestic end product’’ at FAR 25.003 and in the applicable clauses at FAR 52.225–1, 52.225–3, 52.225–9, and 52.225–11, and references at FAR 52.212–3(f)(1) and (g)(1)(iii), 52.225–2(a), and 52.225–4(c), as well as the policy discussion of these definitions at FAR 25.001(c)(1), 25.101(a)(2), and 25.201(b), to include the new E.O. requirement that for ‘‘domestic construction material’’ or a ‘‘domestic end product’’ that does not consist wholly or predominantly of iron or steel or a combination of both, the cost of domestic components must exceed 55 percent of the cost of all components. 2. A new paragraph is added in each definition to address end products or construction materials that consist wholly or predominantly of iron or steel or a combination of both, respectively, to require that the cost of iron and steel not produced in the United States as estimated in good faith by the contractor, must constitute less than 5 percent of the cost of all components. This addition to the definitions was derived and integrated with existing FAR coverage as follows: a. Iron and steel end product means an end product or construction material that consists wholly or predominantly of iron or steel or a combination of both. b. Predominantly of iron or steel or a combination of both means the cost of the iron and steel content in an item that exceeds 50 percent of the total cost of all its components. Basing the predominance on cost, rather than weight, is consistent with the requirement of the E.O. that the foreign iron and steel content be limited to less than 5 percent of the cost of all components. c. Foreign iron and steel means iron and steel not produced in the United States. This is consistent with the definition of ‘‘foreign iron and steel’’ under the Recovery Act (see FAR 25.602–1(a)(1)(ii)). d. When addressing construction materials or end products that are wholly or predominantly iron or steel or a combination of both, it is unnecessary to address unmanufactured construction material or unmanufactured end products, respectively, because the Government does not buy unmanufactured iron and steel end products and construction materials. e. ‘‘Produced in the United States’’ is taken from FAR subpart 25.6, and applies to the iron and steel in construction material and end products II. Discussion and Analysis khammond on DSKJM1Z7X2PROD with PROPOSALS A. Applicability of the Executive Order 13881 to Construction Material Although the E.O. addresses only ‘‘end products’’ in section 2, the Councils have interpreted the term ‘‘end product’’ in the E.O. to include ‘‘construction material.’’ The E.O. doesn’t define the term end product, but in both the title and section 1, addresses maximizing the use of American-made goods, products, and materials, not just end products. Furthermore, section 3 of the E.O. states that it will supersede section 2(a) of E.O. 10582, which addressed ‘‘materials,’’ and has been interpreted in the FAR to cover both end products and construction materials. In addition, the policy relating to iron and steel products has primary impact on the acquisition of construction materials. The Recovery Act applied the restrictions on acquisition of domestic iron and steel products solely to construction materials (see FAR subpart 25.6). Not addressing construction material in this rule would be contrary to the goal of the E.O. to maximize the use of American-made products. VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 56559 that consist wholly or predominantly of iron or steel or a combination of both. f. The definition of ‘‘steel’’ is taken from FAR subpart 25.6. g. Because of the difficulty of estimating the cost of all foreign iron and steel content, the rule proposes a good faith estimate by the contractor, with the exception of fasteners, which, as explained in section II.C., are defined and treated separately. h. The requirement that components of unknown origin be treated as foreign has been incorporated into the definitions of ‘‘domestic end product’’ and ‘‘domestic construction material’’ for those items that do not consist wholly or predominantly of iron or steel or a combination of both. This requirement is comparable to the other requirements already in the definition such as the treatment of domestically nonavailable components and scrap generated in the United States as domestic. This makes it clearer that this is only applicable to items that do not consist wholly or predominantly of iron or steel or a combination of both. i. The rule revises the term ‘‘component test’’ to ‘‘domestic content test,’’ which can apply to either the component content of other than iron or steel products test, or the iron and steel content of iron or steel products, as applicable. With regard to manufactured supplies and materials (whether end products or construction materials), the Buy American statute requires that in order to be considered domestic, such materials and supplies shall have been manufactured in the United States ‘‘substantially all from articles, materials, or supplies mined produced, or manufactured in the United States.’’ E.O. 10582 interpreted this requirement by stating that materials shall be considered to be of foreign origin if the cost of foreign products used in such materials constitutes 50 percent or more of the cost of all the products used in such materials. When incorporated into the FAR, the term ‘‘component’’ was substituted for the term ‘‘product’’ and this has been referred to as the ‘‘component test’’. Although E.O. 13881 retains similar language with regard to end products other than iron and steel end products, just changing the percentage from 50 percent to 45 percent, E.O. 13881 does not reference the term ‘‘product’’ when referring to the cost of iron and steel used in iron and steel end products. It states that ‘‘the cost of foreign iron and steel used in such iron and steel end products constitutes 5 percent or more of the cost of all the products used in such iron and steel end products.’’ Thus, the test for iron and steel is no E:\FR\FM\14SEP1.SGM 14SEP1 56560 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules khammond on DSKJM1Z7X2PROD with PROPOSALS longer a ‘‘component test’’ but a test of the cost of iron and steel content. C. Partial Reinstatement of the Domestic Content Test of the Buy American Statute for Iron and Steel Products In 2009, the Administrator for Federal Procurement Policy waived what is now called the domestic content test (previously called the component test) for commercially available off-the-shelf (COTS) items based on a determination made pursuant to 41 U.S.C. 1907. See FAR Case 2000–305, January 15, 2009, 74 FR 2713. Furtherance of the Buy American statute was driven by retention of the requirement that the product must still be manufactured in the United States. The proposed rule would partially restore the domestic content test for COTS items as it pertains to iron and steel products. The bulk of iron and steel products acquired by the Government are primarily COTS items, used as construction material. Roll-back of the waiver is necessary to give full effect to the E.O.’s requirement that domestic iron and steel products shall not contain more than 5 percent foreign iron and steel. At the same time, the proposed rule would continue to waive the domestic content test for iron and steel fasteners. Fastener is defined as a hardware device that mechanically joins or affixes two or more objects together. Examples of fasteners are nuts, bolts, pins, rivets, nails, clips, and screws. Fasteners are generally so small, inexpensive and comingled that trying to keep track of the origin of all fasteners would create an administrative burden that would outweigh any benefit to the American iron and steel industrial base. The proposed partial reinstatement of the domestic content test for products that consist wholly or predominantly of iron or steel or a combination of both would require changes to the list of inapplicable laws at FAR 12.505(a), the definitions of ‘‘domestic construction material’’ and ‘‘domestic end product,’’ and various other conforming changes wherever waiver of the now domestic content test is mentioned (FAR 25.001(c)(1), 25.100(a)(4), 25.101(a)(2), 25.200(a)(4), 25.201(b)(2), 52.225–1(b), 52.225–3(c), 52.225–9(b), and 52.225– 11(b)). D. Evaluation Factor for Determination of Unreasonable Cost The new E.O. also increases the evaluation factors to be applied to offers of foreign end products or construction material when determining whether the cost of offered domestic end products or construction material is unreasonable. VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 For acquisitions of end products, the factor of 20 percent is to be applied to a foreign offer if the potential domestic awardee is other than a small business, and a 30 percent factor is to be applied if the potential awardee would be a small business (see FAR 25.105(b), 25.204, 25.502(c), 25.604, 25.605, 52.225–9(b)(3)(i), 52.225–11((b)(4)(i), and the Recovery Act clauses at 52.225– 21 through 52.225–24). Consistent with current FAR coverage for acquisitions of foreign construction material under a construction contract, the higher preference for small businesses is inapplicable, because under a construction contract, there are not separately identifiable offers on each item of construction material, but it is part of an overall bid on the project. The foreign material is evaluated on the basis of market research, not a specific competing offer. Thus, only the 20 percent factor would be applied to construction material. E. Applicability to Acquisitions Funded by the Recovery Act Projects funded with monies from section 1605 of the American Recovery and Reinvestment Act of 2009 (the Recovery Act) (Pub. L. 111–5) are subject to more stringent requirements for use of domestic manufactured construction material, particularly iron and steel (see FAR subpart 25.6). The Recovery Act restrictions apply only to construction projects using funds appropriated under that Act. Most of those funds have now been obligated and expended, and there is very little continued applicability of these regulations. The Recovery Act does not apply to unmanufactured construction material, which is therefore still covered by the Buy American statute. The increased requirements of the new E.O. for domestic content for manufactured construction material are therefore inapplicable to acquisitions under the Recovery Act. However, the 20 percent factor that applies to construction contracts covered by the Buy American statute, only applies to the unmanufactured construction material of a construction contract otherwise covered by the Recovery Act. Accordingly, the 6 percent factor is revised to 20 percent at FAR 25.604(c)(2) and 25.605 and in the following Recovery Act provisions and clause: 52.225–21, Required Use of American Iron, Steel, and Manufactured Goods— Buy American Statute—Construction Materials. 52.225–22, Notice of Required Use of American Iron, Steel, and Manufactured PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 Goods—Buy American Statute— Construction Materials. 52.225–23, Required Use of American Iron, Steel, and Manufactured Goods— Buy American Statute—Construction Materials Under Trade Agreements. 52.225–24, Notice of Required Use of American Iron, Steel, and Manufactured Goods—Buy American Statute— Construction Materials Under Trade Agreements. III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items This proposed rule does not add any new provisions or clauses, nor change the applicability of existing provisions or clauses to contracts at or below the SAT and contracts for the acquisition of commercial items, including COTS items. However, this rule does propose to apply the domestic content test of the Buy American statute, as implemented by E.O. 13881, to COTS items that consist wholly or predominantly of iron and steel (excluding fasteners). In accordance with 41 U.S.C. 1907, since 2008, the domestic content test of the Buy American statute has been waived for COTS items, in part due to the complexity and cost of keeping track of components in a world of global sourcing where the Government is not a market driver. However, the domestic content test for the iron and steel items does not require tracking of all components, only a good faith assurance that not more than 5 percent of the iron and steel content is foreign. In addition, absent restoration of the domestic content test, the E.O. 13881 requirement with regard to iron and steel construction material would have very little effect. As explained above, the domestic content waiver for COTS items would continue to apply to iron and steel fasteners, such as nuts, bolts, pins, rivets, nails, clips, and screws, which are generally so small, inexpensive and comingled that trying to keep track of the origin of all fasteners would create an administrative burden that would outweigh any benefit to the American iron and steel industrial base. 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 E:\FR\FM\14SEP1.SGM 14SEP1 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules khammond on DSKJM1Z7X2PROD with PROPOSALS 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. V. Expected Impact of the Proposed Rule The current FAR clauses implementing the Buy American statute apply to a narrow set of procurements. Also, because the FAR Council is leaving the COTS items exception in place for most COTS items, the heightened domestic content requirements will not be applicable to those procurements. When this rule is implemented, domestic industries supplying domestic end products are likely to benefit from a competitive advantage. Based on the E.O., it is unclear if the pool of qualified suppliers would be reduced, resulting in less competition (and a possible increase in prices that the Government will pay to procure these products). At least three arguments point to the possibility that any increased burden, on contractors in particular, could be small if not de minimis: (1) Familiarization costs should be low, (2) some, if not many, contractors may already be able to meet the more stringent threshold, and (3) costs incurred by contractors who adjust their supply chains so that their end products qualify as domestic will enjoy a larger price preference that should help to offset these costs over time. Each of these arguments is explained below. First, DoD, GSA, and NASA do not anticipate significant cost from contractor familiarization with the rule given the history of rulemaking and E.O.s in this area. The basic mechanics of the Buy American statute (e.g., definitions, how and when the price preference is used to favor domestic end products, certifications required of offerors to demonstrate end products are domestic) remain unchanged and continue to reflect processes that are decades old. Second, some, if not many, contractors may already be able to comply with the lower foreign content requirement needed to meet the definition of domestic end product under E.O. 13881 and the proposed rule. Laws such as the SECURE Technology Act, Public Law 115–390, which requires a series of actions to strengthen VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 the Federal infrastructure for managing supply chain risks, are placing significantly increased emphasis on Federal agencies and Federal Government contractors to identify and reduce risk in their supply chains. One way to reduce supply chain risk is to increase domestic sourcing of content. In addition, in the context of iron and steel, many laws already in place call for more stringent content. For example, the Recovery Act required that all construction material for a project for the construction, alteration, maintenance, or repair of a public building or a public work in the United States, consisting wholly or predominantly of iron or steel, had to be produced in the United States when using Recovery Act funds, to the extent consistent with trade agreements (see FAR 25.602–1, implementing section 1605 of the Recovery Act). In addition, Federal contractors who also work on contracts funded under Federal grants may, in some cases, find that the steel, iron, and manufactured goods used in the project be produced in the United States, as is the case for certain funding administrated by the Federal Transit Administration for public transportation projects (see 49 U.S.C. 5323(j)). Accordingly, it is possible that the Federal market for iron and steel has already done significant retooling and could meet the requirements of E.O. 13881 without too much additional effort. Third, it is anticipated that some contractors’ products and construction materials may not meet the definition of domestic end product and construction material unless the contractors take steps to adjust their supply chains to increase the domestic content. Those contractors that make a business decision not to modify their supply chains will still be able to bid on Federal contracts but will no longer enjoy a price preference. Those contractors that sell to civilian agencies and retool their supply sources to meet the more stringent threshold will have a more generous price preference applied to their products—i.e., 20 percent generally under the new rule vs. 6 percent under the current rule; 30 percent if the seller is a small business vs. 12 percent under the current rule. These stronger preferences, which are designed as an incentive to encourage more domestic sourcing, may help to offset costs of meeting the new standards. This rule has the potential to slightly increase the estimated percentage of foreign offers. It can only impact products that are made in the United States as follows: Iron or steel that has PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 56561 a content of 5 percent or more of foreign iron or steel; or other products, other than COTS items, that have a content of 45 to 50 percent foreign components. Offerors of such products have an option to increase the domestic content and continue to offer domestic products, in which case they may benefit from the increased preference for domestic products, or they may choose to continue to offer the same product, which will now be evaluated as foreign. We do not have any data on how many currently domestic products would fall into this category. Nor do we have any knowledge as to which option an offeror of such products would select. With regard to the increased price preference for domestic offers, we note that robust competition among vendors offering domestic products will decrease the extent to which the Government could pay an additional 20 to 30 percent for domestic products above and beyond the cost of otherwise equivalent foreign products. DoD, GSA, and NASA do not expect a significant cost impact on the public but lack data to make a definitive determination and seek information from the public to assist with this analysis. Feedback is requested on the following questions: (1) What industry do you represent? Are you a manufacturer or a reseller? (2) For manufacturers and resellers of end products other than iron and steel— (a) Do you currently meet the higher standards specified in the proposed rule for a domestic end product or construction material or would you have to make adjustments to your supply chain to meet the new requirements? (b) If you would have to make adjustments to your supply chain in response to changes proposed here, do you plan to do so? (c) If the answer to question (b) is yes, how much do you think it will cost to make these changes, and to what extent do you believe this cost will be offset by the increased preference applicable to purchases by civilian agencies if you move toward products with higher domestic content? (3) For sellers of iron and steel, what, if any, adjustments do you anticipate having to make to your supply chain to meet the new requirements, and how much do acquisition costs vary between iron and steel with less or equal than 95 percent domestic content, and greater than 95 percent domestic content? (4) Section 4 of E.O. 13881 directed consideration of the ‘‘feasibility and desirability’’ of further decreases in the threshold percentage of foreign content allowed for an end product other than E:\FR\FM\14SEP1.SGM 14SEP1 56562 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules iron or steel to be considered domestic from the 45 percent proposed in this rule to 25 percent. Accordingly, DoD, GSA, and NASA encourage manufacturers and resellers of end products other than iron and steel to provide input on the feasibility and desirability of adopting this more stringent standard by addressing the following— (a) Could you currently meet a 25 percent foreign content requirement for domestic end products or construction material or would you have to make adjustments to your supply chain to do so? (b) If you would have to make adjustments to your supply chain to meet a 25 percent requirement, would you do so? (c) If the answer to question (b) is yes, how much do you think it would cost to come into compliance, how much would acquisition costs for these materials rise, and to what extent do you believe this cost would be offset by the increased preference applicable to purchases by civilian agencies? (d) Do you think it is preferable to work towards a 25 percent threshold incrementally? If so, why and what incremental change would you propose over what period of time? VI. Executive Order 13771 DoD, GSA, and NASA do not expect this to be considered a regulatory action under E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, because this rule is expected to have a de minimis burden impact on the public (see section V of this preamble). VII. Regulatory Flexibility Act DoD, GSA, and NASA do not expect this 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 this rule does not impose new requirements just changes to the existing percentages. This rule proposes to make adjustments to the required percentage of domestic content and the existing percentages for the price evaluation preferences in an effort to decrease the amount of foreignsourced content in a U.S. manufactured product to promote economic and national security, help stimulate economic growth, and create jobs. Nevertheless, an Initial Regulatory Flexibility Analysis (IRFA) has been performed and summarized as follows: This case amends the FAR to implement an Executive order regarding maximizing the use of American-made goods, products, and materials. The objective of this proposed rule is to strengthen domestic preferences under the Buy American statute, as required by E.O. 13881, by changing how a domestic product is defined and how the price of a domestic product is determined to be unreasonable. In accordance with Federal Procurement Data System data for fiscal years (FY) 2017, 2018, and 2019 for new awards with foreign place of performance for construction valued over the micro-purchase threshold and awards for supplies to unique small businesses; this rule will apply to only the 8 percent of foreign construction awards which were made to small businesses and, only 14 percent of foreign supply awards were made to small businesses. FY 2017 FY 2018 FY 2019 Median SB/Total SB/Total SB/Total SB % Buy American statute Construction ................................................................................... Supplies ......................................................................................... khammond on DSKJM1Z7X2PROD with PROPOSALS This rule is covered under the existing information collection requirements associated with the Buy American statute. The rule will strengthen domestic preferences under the Buy American statute and provide small businesses the opportunity and incentive to deliver U.S. manufactured products from domestic suppliers. It is expected that this rule will benefit U.S. small business manufacturers, including those of iron or steel. This rule does not duplicate, overlap, or conflict with any other Federal rules. DoD, GSA, and NASA were unable to identify any significant alternatives. The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained for the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities. DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C 610 VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 18/217 = 8% 153/1,200 = 13 13/223 = 6% 164/1,161 = 14 15/199 = 8% 164/1,048 = 16 (FAR Case 2019–016), in correspondence. Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113. VIII. Paperwork Reduction Act PART 12—ACQUISITION OF COMMERCIAL ITEMS The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply; however, these changes to the FAR do not impose additional information collection requirements to the paperwork burden previously approved under the Office of Management and Budget Control Number 9000–0024, Buy American, Trade Agreements, and Duty-Free EntryFAR Sections Affected: 52.225–2; 52.225–4, 52.225–6, 52.225–8 thru 52.225–12, and 52.225–21 & 52.225–23. List of Subjects in 48 CFR Parts 12, 25, and 52 Government procurement. William F. Clark, Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy. Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 12, 25, and 52 as set forth below: 1. The authority citation for 48 CFR parts 12, 25, and 52 continues to read as follows: ■ PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 8% 14 2. Amend section 12.505 by revising paragraph (a) to read as follows: ■ 12.505 Applicability of certain laws to contracts for the acquisition of COTS items. * * * * * (a)(1) The portion of 41 U.S.C. 8302, American Materials Required for Public Use, paragraph (a)(1) that reads ‘‘substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States,’’ Buy American—Supplies, domestic content test, except as provided in 25.101(a)(2)(ii) (see 52.225–1 and 52.225–3). (2) The portion of 41 U.S.C. 8303, Contracts for Public Works, paragraph (a)(2) that reads ‘‘substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States,’’ Buy American— Construction Materials, domestic content test, except as provided in 25.201(b)(2)(ii)(see 52.225–9 and 52.225–11). * * * * * E:\FR\FM\14SEP1.SGM 14SEP1 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules PART 25—FOREIGN ACQUISITION 3. Amend section 25.001 by revising paragraph (c)(1) to read as follows: ■ 25.001 General. * * * * * (c) * * * (1) The Buy American statute uses a two-part test to define a ‘‘domestic end product’’ or ‘‘domestic construction material’’ (manufactured in the United States and a domestic content test). The domestic content test has been waived for acquisition of commercially available off-the-shelf items, except a product that consists wholly or predominantly of iron or steel or a combination of both (excluding fasteners) (see 25.101(a) and 25.201(b)). * * * * * ■ 4. Amend section 25.003 by— ■ a. Revising the definitions ‘‘Domestic construction material’’ and ‘‘Domestic end product’’; and ■ b. Adding in alphabetical order the definitions ‘‘Fastener’’, ‘‘Predominantly of iron or steel or a combination of both’’, and ‘‘Steel’’. The revisions and additions read as follows: 25.003 Definitions. khammond on DSKJM1Z7X2PROD with PROPOSALS * * * * * Domestic construction material means— (1) For use in subparts other than 25.6— (i) For construction material that does not consist wholly or predominantly of iron or steel or a combination of both— (A) An unmanufactured construction material mined or produced in the United States; or (B) A construction material manufactured in the United States, if— (1) The cost of the components mined, produced, or manufactured in the United States exceeds 55 percent of the cost of all its components. Components of foreign origin of the same class or kind for which nonavailability determinations have been made are treated as domestic. Components of unknown origin are treated as foreign; or (2) The construction material is a COTS item; or (ii) For construction material that consists wholly or predominantly of iron or steel or a combination of both, a construction material manufactured in the United States if the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, constitutes less than 5 percent of the cost of all the components used in such construction material (produced in the United States VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 means that all manufacturing processes of the iron or steel must take place in the United States, except metallurgical processes involving refinement of steel additives); or (2) For use in subpart 25.6, see the definition in 25.601. Domestic end product means— (1) For an end product that does not consist wholly or predominantly of iron or steel or a combination of both— (i) An unmanufactured end product mined or produced in the United States; (ii) An end product manufactured in the United States, if— (A) The cost of its components mined, produced, or manufactured in the United States exceeds 55 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Components of unknown origin are treated as foreign. Scrap generated, collected, and prepared for processing in the United States is considered domestic; or (B) The end product is a COTS item; or (2) For an end product that consists wholly or predominantly of iron or steel or a combination of both, an end product manufactured in the United States, if the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, constitutes less than 5 percent of the cost of all the components used in the end product (produced in the United States means that all manufacturing processes of the iron or steel must take place in the United States, except metallurgical processes involving refinement of steel additives). * * * * * Fastener means a hardware device that mechanically joins or affixes two or more objects together. Examples of fasteners are nuts, bolts, pins, rivets, nails, clips, and screws. * * * * * Predominantly of iron or steel or a combination of both means that the cost of the iron and steel content in an item exceeds 50 percent of the total cost of all its components. Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. * * * * * ■ 5. Amend section 25.100 by— ■ a. Removing from the end of paragraph (a)(2) ‘‘and’’; PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 56563 b. Redesignating paragraph (a)(3) as paragraph (a)(4); ■ c. Adding a new paragraph (a)(3); and ■ d. Revising the newly redesignated paragraph (a)(4). The addition and revision read as follows: ■ 25.100 Scope of subpart. (a) * * * (3) Executive Order 13881, July 15, 2019; and (4) Waiver of the domestic content test of the Buy American statute for acquisition of commercially available off-the-shelf (COTS) items in accordance with 41 U.S.C. 1907, but see 25.101(a)(2)(ii). * * * * * ■ 6. Amend section 25.101 by— ■ a. Removing from paragraph (a) introductory text ‘‘statute uses’’ and adding ‘‘statute and E.O. 13881 use’’ in its place; ■ b. Revising paragraph (a)(2); ■ c. Removing from paragraph (b) ‘‘component test’’ and adding ‘‘domestic content test’’ in its place; and ■ d. Removing from paragraph (c) ‘‘Subpart 25.5’’ and adding ‘‘subpart 25.5’’ in its place. The revision reads as follows: 25.101 General. (a) * * * (2)(i) Except for an end product that consists wholly or predominantly of iron or steel or a combination of both, the cost of domestic components must exceed 55 percent of the cost of all the components. In accordance with 41 U.S.C. 1907, this domestic content test of the Buy American statute has been waived for acquisitions of COTS items (see 12.505(a)) (but see paragraph (a)(2)(ii) of this section). (ii) For an end product that consists wholly or predominantly of iron or steel or a combination of both, the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, must constitute less than 5 percent of the cost of all the components used in the end product. This domestic content test of the Buy American statute has not been waived for acquisitions of COTS items in this category, except for fasteners. * * * * * 25.105 [Amended] 7. Amend section 25.105 by— a. Removing from paragraph (b)(1) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place; and ■ b. Removing from paragraph (b)(2) ‘‘12 percent’’ and ‘‘Subpart 19.5’’ and adding ‘‘30 percent’’ and ‘‘subpart 19.5’’ in their places, respectively. ■ ■ E:\FR\FM\14SEP1.SGM 14SEP1 56564 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules 8. Amend section 25.200 by— a. Removing from the end of paragraph (a)(2) ‘‘and’’; ■ b. Redesignating paragraph (a)(3) as paragraph (a)(4); ■ c. Adding a new paragraph (a)(3); and ■ d. Revising the newly redesignated paragraph (a)(4). The addition and revision read as follows: ■ ■ 25.200 Scope of subpart. (a) * * * (3) Executive Order 13881, July 15, 2019; and (4) Waiver of the domestic content test of the Buy American statute for acquisitions of commercially available off-the-shelf (COTS) items in accordance with 41 U.S.C. 1907, but see 25.201(b)(2)(ii). * * * * * ■ 9. Revise section 25.201 to read as follows: 25.201 Policy. (a) Except as provided in 25.202, use only domestic construction materials in construction contracts performed in the United States. (b) The Buy American statute restricts the purchase of construction materials that are not domestic construction materials. For manufactured construction materials, the Buy American statute and E.O. 13881 use a two-part test to define domestic construction materials. (1) The article must be manufactured in the United States; and (2)(i) Except for construction material that consists wholly or predominantly of iron or steel or a combination of both, the cost of domestic components must exceed 55 percent of the cost of all the components. In accordance with 41 U.S.C. 1907, this domestic content test of the Buy American statute has been waived for acquisitions of COTS items (see 12.505(a)). (ii) For construction material that consists wholly or predominantly of iron or steel or a combination of both, the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, must constitute less than 5 percent of the cost of all the components used in such construction material. This domestic content test of the Buy American statute has not been waived for acquisitions of COTS items in this category, except for fasteners. 25.204 [Amended] 10. Amend section 25.204 in paragraph (b) by removing ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place. ■ 11. Amend section 25.504–1 by— ■ a. Revising the table in paragraph (a)(1); ■ b. Removing from paragraph (a)(2) ‘‘12 percent’’ and ‘‘$11,200’’ and adding ‘‘30 percent’’ and ‘‘$13,000’’ in their places, respectively; and ■ c. Removing from paragraph (b)(2) ‘‘12 percent’’ and ‘‘$11,424’’ and adding ‘‘30 percent’’ and ‘‘$13,260’’ in their places, respectively. The revision reads as follows: ■ 25.504–1 Offer A .... $16,000 Offer B .... 15,700 Offer C ... 10,000 Domestic end product, small business. Domestic end product, small business. U.S.-made end product (not domestic), small business. * * * * * 12. Amend section 25.504–2 by revising the table to read as follows: ■ 25.504–2 WTO GPA/Caribbean Basin Trade Initiative/FTAs. * Offer A .... 303,000 Offer C ... Offer D ... 300,000 295,000 U.S.-made end product (domestic), small business. Eligible product. Noneligible product (not U.S.-made). * * * * * 13. Amend section 25.504–3 by— ■ a. Revising the entry ‘‘Offer B’’ in the table in paragraph (a); ■ b. Revising the entry ‘‘Offer B’’ in the table in paragraph (b); and ■ c. Revising entries ‘‘Offer B’’ and ‘‘Offer C’’ in the table in paragraph (c). The revisions read as follows: ■ 25.504–3 FTA/Israeli Trade Act. (a) * * * * Offer B ... * * $100,000 * * (b) * * * * Offer B ... * * * Eligible product. * * $103,000 * * (c) * * * * * * * * Noneligible product. * * Buy American statute. (a)(1) * * * * Offer B .... * * $304,000 * U.S.-made end product (not domestic). * Offer B ... Offer C ... * $103,000 100,000 * * * Eligible product. Noneligible product. * * * * * 14. Amend section 25.504–4 by— ■ a. In paragraph (a)— ■ i. Revising the table; ■ ii. In STEP 1, Items 3 and 5, removing ‘‘6 percent’’ and adding ‘‘20 percent’’ in their places, respectively; and ■ iii. Revising STEP 2 and 3. ■ b. Revising paragraph (b). The revisions read as follows: ■ 25.504–4 Group award basis. (a) * * * Offers Item A khammond on DSKJM1Z7X2PROD with PROPOSALS 1 2 3 4 5 * B C ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. DO = $55,000 NEL = 13,000 NEL = 11,500 NEL = 24,000 DO = 18,000 EL = $56,000 EL = 10,000 DO = 12,000 EL = 28,000 NEL = 10,000 NEL = $50,000. EL = 13,000 DO = 10,000 NEL = 22,000 DO = 14,000 Total ................................................................................................................................ 121,500 116,000 109,000 * * VerDate Sep<11>2014 * * 16:50 Sep 11, 2020 STEP 2: Evaluate Offer C against the tentative award pattern for Offers A and B: Jkt 250001 PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 E:\FR\FM\14SEP1.SGM 14SEP1 56565 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules Offers Item Tentative award pattern from A and B Low offer 1 ...................................................... A ............................................................................................................. DO = $55,000 2 3 4 5 B B A B EL DO NEL *NEL ...................................................... ...................................................... ...................................................... ...................................................... Total ......................................... ............................................................................................................. ............................................................................................................. ............................................................................................................. ............................................................................................................. ................................................................................................................. = = = = 10,000 12,000 24,000 12,000 C EL DO NEL DO 113,000 * NEL = $60,000. = 13,000 = 10,000 = 22,000 = 14,000 119,000 * Offer + 20 percent. On a line item basis, apply a factor to any noneligible offer if the other offer for that line item is domestic. For Item 1, apply a factor to Offer C because Offer A is domestic and the acquisition was not covered by the WTO GPA. The evaluated price of Offer C, Item 1, becomes $60,000 ($50,000 plus 20 percent). Apply a factor to Offer B, Item 5, because it is a noneligible product and Offer C is domestic. The evaluated price of Offer B is $12,000 ($10,000 plus 20 percent). Evaluate the remaining items without applying a factor. STEP 3: The tentative unrestricted award pattern from Offers A and B is lower than the evaluated price of Offer C. Award the combination of Offers A and B. Note that if Offer C had not specified all-or-none award, award would be made on Offer C for line items 3 and 4, totaling an award of $32,000. (b) Example 2. Offers Item A 1 2 3 4 B C ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. DO = $50,000 NEL = 10,300 EL = 20,400 DO = 10,500 EL = $50,500 NEL = 10,000 EL = 21,000 DO = 10,300 NEL = $50,000. EL = 10,200 NEL = 20,200 DO = 10,400 Total ................................................................................................................................ 91,200 91,800 90,800 Problem: The solicitation specifies award on a group basis. Assume the Buy American statute applies and the acquisition cannot be set aside for small business concerns. All offerors are large businesses. Analysis: (See 25.503(c)) STEP 1: Determine which of the offers are domestic (see 25.503(c)(1)): Domestic (percent) A ................... B ................... C .................. Determination $50,000 (Offer A1) + $10,500 (Offer A4) = $60,500 ...................................................................................... $60,500/$91,200 (Offer A Total) = 66.3%. $10,300 (Offer B4)/$91,800 (Offer B Total) = 11.2% ..................................................................................... $10,400 (Offer C4)/$90,800 (Offer C Total) = 11.5% ..................................................................................... Domestic. Foreign. Foreign. STEP 2: Determine whether foreign offers are eligible or noneligible offers (see 25.503(c)(2)): Domestic + eligible (percent) A ................... B ................... khammond on DSKJM1Z7X2PROD with PROPOSALS C .................. N/A (Both Domestic) ....................................................................................................................................... $50,500 (Offer B1) + $21,000 (Offer B3) + $10,300 (Offer B4) = $81,800 ................................................... $81,800/$91,800 (Offer B Total) = 89.1%. $10,200 (Offer C2) + $10,400 (Offer C4) = $20,600 ...................................................................................... $20,600/$90,800 (Offer C Total) = 22.7%. STEP 3: Determine whether to apply an evaluation factor (see 25.503(c)(3)). The low offer (Offer C) is a foreign offer. There is no eligible offer lower than the domestic offer. Therefore, apply the factor to the low offer. Addition of the VerDate Sep<11>2014 Determination 16:50 Sep 11, 2020 Jkt 250001 20 percent factor (use 30 percent if Offer A is a small business) to Offer C yields an evaluated price of $108,960 ($90,800 + 20 percent). Award on Offer A (see 25.502(c)(4)(ii)). Note that, if Offer A were greater than Offer B, an evaluation PO 00000 Frm 00030 Fmt 4702 Sfmt 4702 Domestic. Eligible. Noneligible. factor would not be applied, and award would be on Offer C (see 25.502(c)(3)). 25.601 [Amended] 15. Amend section 25.601 by removing the definition ‘‘Steel’’. ■ E:\FR\FM\14SEP1.SGM 14SEP1 56566 25.604 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules [Amended] 16. Amend section 25.604 in paragraph (c)(2) by removing ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place. ■ 25.605 [Amended] 17. Amend section 25.605 by— a. Removing from paragraph (a)(2) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place; and ■ b. Removing from paragraph (a)(3) ‘‘.06’’ and adding ‘‘.20’’ in its place. ■ ■ PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 18. Amend section 52.212–3 by— a. Revising the date of the provision; and ■ b. Revising paragraphs (f)(1), (g)(1)(i), the first sentence of (g)(1)(ii), and (g)(1)(iii) introductory text. The revisions read as follows: ■ ■ 52.212–3 Offeror Representations and Certifications—Commercial Items. * * * * * 52.212–5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Items. Offeror Representations and Certifications—Commercial Items (DATE) khammond on DSKJM1Z7X2PROD with PROPOSALS * * * * * * (f) * * * (1)(i) The Offeror certifies that each end product, except those listed in paragraph (f)(2) of this provision, is a domestic end product. (ii) The Offeror shall list as foreign end products those end products manufactured in the United States that do not qualify as domestic end products. (iii) The terms ‘‘domestic end product,’’ ‘‘end product,’’ ‘‘foreign end product,’’ and ‘‘United States’’ are defined in the clause of this solicitation entitled ‘‘Buy American-Supplies.’’ * * * * * (g)(1) * * * (i)(A) The Offeror certifies that each end product, except those listed in paragraph (g)(1)(ii) or (iii) of this provision, is a domestic end product. (B) The terms ‘‘Bahrainian, Moroccan, Omani, Panamanian, or Peruvian end product,’’ ‘‘domestic end product,’’ ‘‘end product,’’ ‘‘foreign end product,’’ ‘‘Free Trade Agreement country,’’ ‘‘Free Trade Agreement country end product,’’ ‘‘Israeli end product,’’ and ‘‘United States’’ are defined in the clause of this solicitation entitled ‘‘Buy American— Free Trade Agreements—Israeli Trade Act.’’ (ii) The Offeror certifies that the following supplies are Free Trade Agreement country end products (other than Bahrainian, Moroccan, Omani, Panamanian, or Peruvian end products) VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 or Israeli end products as defined in the clause of this solicitation entitled ‘‘Buy American—Free Trade Agreements— Israeli Trade Act.’’ * * * * * (iii) The Offeror shall list those supplies that are foreign end products (other than those listed in paragraph (g)(1)(ii) of this provision) as defined in the clause of this solicitation entitled ‘‘Buy American—Free Trade Agreements—Israeli Trade Act.’’ The Offeror shall list as other foreign end products those end products manufactured in the United States that do not qualify as domestic end products. * * * * * ■ 19. Amend section 52.212–5 by— ■ a. Revising the date of the clause; and ■ b. Removing from paragraphs (b)(48) and (b)(49)(i) through (iv) ‘‘(MAY 2014)’’ and adding ‘‘(DATE)’’ in their places, respectively. The revision reads as follows: * * * * Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Items (DATE) * * * * * 20. Amend section 52.213–4 by— a. Revising the date of the clause; and b. Removing from paragraph (b)(1)(xvii) introductory text ‘‘(MAY 2014)’’ and adding ‘‘(DATE)’’ in its place. The revision reads as follows: ■ ■ ■ 52.213–4 Terms and Conditions— Simplified Acquisitions (Other Than Commercial Items). * * * * * Terms and Conditions—Simplified Acquisitions (Other Than Commercial Items) (DATE) * * * * * 21. Amend section 52.225–1 by— a. Revising the date of the clause; b. In paragraph (a): i. Revising the definition ‘‘Domestic end product’’; and ■ ii. Adding in alphabetical order the definitions ‘‘Fastener’’ and ‘‘Steel’’; and ■ c. Revising paragraph (b). The revisions and additions read as follows: ■ ■ ■ ■ 52.225–1 * * Buy American—Supplies. * * * Buy American—Supplies (DATE) (a) * * * Domestic end product means— PO 00000 Frm 00031 Fmt 4702 Sfmt 4702 (1) For an end product that does not consist wholly or predominantly of iron or steel or a combination of both— (i) An unmanufactured end product mined or produced in the United States; (ii) An end product manufactured in the United States, if— (A) The cost of its components mined, produced, or manufactured in the United States exceeds 55 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Components of unknown origin are treated as foreign. Scrap generated, collected, and prepared for processing in the United States is considered domestic; or (B) The end product is a COTS item; or (2) For an end product that consists wholly or predominantly of iron or steel or a combination of both, an end product manufactured in the United States, if the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, constitutes less than 5 percent of the cost of all the components used in the end product (produced in the United States means that all manufacturing processes of the iron or steel must take place in the United States, except metallurgical processes involving refinement of steel additives). * * * * * Fastener means a hardware device that mechanically joins or affixes two or more objects together. Examples of fasteners are nuts, bolts, pins, rivets, nails, clips, and screws. * * * * * Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. * * * * * (b) 41 U.S.C. chapter 83, Buy American, provides a preference for domestic end products for supplies acquired for use in the United States. In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for an end product that is a COTS item (see 12.505(a)(1)), except that for an end product that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the end product, excluding fasteners. * * * * * 22. Amend section 52.225–2 by revising the date of the provision and paragraph (a) to read as follows: ■ 52.225–2 * * Buy American Certificate. * * * Buy American Certificate (DATE) (a)(1) The Offeror certifies that each end product, except those listed in paragraph (b) of this provision, is a domestic end product. (2) The Offeror shall list as foreign end products those end products manufactured in the United States that do not qualify as domestic end products. E:\FR\FM\14SEP1.SGM 14SEP1 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules (3) The terms ‘‘domestic end product,’’ ‘‘end product,’’ and ‘‘foreign end product’’ are defined in the clause of this solicitation entitled ‘‘Buy American—Supplies.’’ objects together. Examples of fasteners are nuts, bolts, pins, rivets, nails, clips, and screws. * Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. * * * * ■ 23. Amend section 52.225–3 by— ■ a. Revising the date of the clause; ■ b. In paragraph (a): ■ i. Revising the definition ‘‘Domestic end product’’; and ■ ii. Adding in alphabetical order the definitions ‘‘Fastener’’ and ‘‘Steel’’; ■ c. Revising the second sentence of paragraph (c); ■ d. Revising the date in the introductory text and the second sentence of paragraph (c) of Alternate I; ■ e. Revising the date in the introductory text and the second sentence of paragraph (c) of Alternate II; and ■ f. Revising the date in the introductory text and the second sentence of paragraph (c) of Alternate III. The revisions and additions read as follows: 52.225–3 Buy American—Free Trade Agreements—Israeli Trade Act. * * * * * khammond on DSKJM1Z7X2PROD with PROPOSALS Buy American—Free Trade Agreements—Israeli Trade Act (DATE) (a) * * * Domestic end product means— (1) For an end product that does not consist wholly or predominantly of iron or steel or a combination of both— (i) An unmanufactured end product mined or produced in the United States; (ii) An end product manufactured in the United States, if— (A) The cost of its components mined, produced, or manufactured in the United States exceeds 55 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Components of unknown origin are treated as foreign. Scrap generated, collected, and prepared for processing in the United States is considered domestic; or (B) The end product is a COTS item; or (2) For an end product that consists wholly or predominantly of iron or steel or a combination of both, an end product manufactured in the United States, if the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, constitutes less than 5 percent of the cost of all the components used in the end product (produced in the United States means that all manufacturing processes of the iron or steel must take place in the United States, except metallurgical processes involving refinement of steel additives). * * * * * Fastener means a hardware device that mechanically joins or affixes two or more VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 * * * * * * * * * * (c) * * * In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for an end product that is a COTS item (see 12.505(a)(1)), except that for an end product that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the end product, excluding fasteners. * * * Alternate I (DATE) * * * (c) * * * In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for an end product that is a COTS item (see 12.505(a)(1)), except that for an end product that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the end product, excluding fasteners. * * * Alternate II (DATE) * * * (c) * * * In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for an end product that is a COTS item (see 12.505(a)(1)), except that for an end product that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the end product, excluding fasteners. * * * Alternate III (DATE) * * * (c) * * * In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for an end product that is a COTS item (see 12.505(a)(1)), except that for an end product that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the end product, excluding fasteners. * * * 24. Amend section 52.225–4 by— a. Revising the date of the provision; b. Revising paragraph (a); c. In paragraph (b) introductory text removing ‘‘offeror’’ and adding ‘‘Offeror’’ in its place; ■ d. Revising the first and second sentences of paragraph (c); ■ e. In Alternate I by— ■ i. Revising the date of the Alternate; and ■ ii. Removing from paragraph (b) introductory text ‘‘offeror’’ and adding ‘‘Offeror’’ in its place; ■ f. In Alternate II by— ■ i. Revising the date of the Alternate; and ■ ii. Removing from paragraph (b) introductory text ‘‘offeror’’ and adding ‘‘Offeror’’ in its place; and ■ ■ ■ ■ PO 00000 Frm 00032 Fmt 4702 Sfmt 4702 56567 g. In Alternate III by— i. Revising the date of the Alternate; and ■ ii. Removing from paragraph (b) introductory text ‘‘offeror’’ and adding ‘‘Offeror’’ in its place. The revisions read as follows: ■ ■ 52.225–4 Buy American-Free Trade Agreements-Israeli Trade Act Certificate. * * * * * Buy American-Free Trade AgreementsIsraeli Trade Act Certificate (DATE) (a)(1) The Offeror certifies that each end product, except those listed in paragraph (b) or (c) of this provision, is a domestic end product. (2) The terms ‘‘Bahrainian, Moroccan, Omani, Panamanian, or Peruvian end product,’’ ‘‘domestic end product,’’ ‘‘end product,’’ ‘‘foreign end product,’’ ‘‘Free Trade Agreement country,’’ ‘‘Free Trade Agreement country end product,’’ ‘‘Israeli end product,’’ and ‘‘United States’’ are defined in the clause of this solicitation entitled ‘‘Buy AmericanFree Trade Agreements–Israeli Trade Act.’’ * * * * * (c) The Offeror shall list those supplies that are foreign end products (other than those listed in paragraph (b) of this provision) as defined in the clause of this solicitation entitled ‘‘Buy American—Free Trade Agreements—Israeli Trade Act.’’ The Offeror shall list as other foreign end products those end products manufactured in the United States that do not qualify as domestic end products. * * * * * Alternate I (DATE) * * * Alternate II (DATE) * * * Alternate III (DATE) * * * 25. Amend section 52.225–9 by— a. Revising the date of the clause; b. In paragraph (a): i. Revising the definition ‘‘Domestic construction material’’; and ■ ii. Adding in alphabetical order the definitions ‘‘Fastener’’ and ‘‘Steel’’; ■ c. Revising paragraph (b)(1); and ■ d. Removing from paragraph (b)(3)(i) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place. The revisions and additions read as follows: ■ ■ ■ ■ 52.225–9 Buy American—Construction Materials. * * * * * Buy American—Construction Materials (DATE) (a) * * * Domestic construction material means— (1) For construction material that does not consist wholly or predominantly of iron or steel or a combination of both— (i) An unmanufactured construction material mined or produced in the United States; or (ii) A construction material manufactured in the United States, if— E:\FR\FM\14SEP1.SGM 14SEP1 56568 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules (A) The cost of its components mined, produced, or manufactured in the United States exceeds 55 percent of the cost of all its components. Components of foreign origin of the same class or kind for which nonavailability determinations have been made are treated as domestic. Components of unknown origin are treated as foreign; or (B) The construction material is a COTS item. (2) For construction material that consists wholly or predominantly of iron or steel or a combination of both, a construction material manufactured in the United States if the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, constitutes less than 5 percent of the cost of all components used in such construction material (produced in the United States means that all manufacturing processes of the iron or steel must take place in the United States, except metallurgical processes involving refinement of steel additives). Fastener means a hardware device that mechanically joins or affixes two or more objects together. Examples of fasteners are nuts, bolts, pins, rivets, nails, clips, and screws. * * * * * Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. * * * * * (b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy American, by providing a preference for domestic construction material. In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for construction material that is a COTS item, except that for construction material that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the construction materials, excluding fasteners. (See FAR 12.505(a)(2)). The Contractor shall use only domestic construction material in performing this contract, except as provided in paragraphs (b)(2) and (b)(3) of this clause. * * * * * 26. Amend section 52.225–11 by— a. Revising the date of the clause; b. In paragraph (a): i. Revising the definition ‘‘Domestic construction material’’; and ■ ii. Adding in alphabetical order the definitions ‘‘Fastener’’ and ‘‘Steel’’; ■ c. Revising paragraph (b)(1); ■ d. Removing from paragraph (b)(4)(i) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place; and ■ e. In Alternate I— ■ i. Revising the date of the Alternate; and ■ ii. Revising paragraph (b)(1). The revisions and additions read as follows: khammond on DSKJM1Z7X2PROD with PROPOSALS ■ ■ ■ ■ 52.225–11 Buy American—Construction Materials Under Trade Agreements. * * * VerDate Sep<11>2014 * * 16:50 Sep 11, 2020 Jkt 250001 Buy American—Construction Materials Under Trade Agreements (DATE) (a) * * * Domestic construction material means— (1) For construction material that does not consist wholly or predominantly of iron or steel or a combination of both— (i) An unmanufactured construction material mined or produced in the United States; or (ii) A construction material manufactured in the United States, if— (A) The cost of its components mined, produced, or manufactured in the United States exceeds 55 percent of the cost of all its components. Components of foreign origin of the same class or kind for which nonavailability determinations have been made are treated as domestic. Components of unknown origin are treated as foreign; or (B) The construction material is a COTS item; (2) For construction material that consists wholly or predominantly of iron or steel or a combination of both, a construction material manufactured in the United States if the cost of iron and steel not produced in the United States (excluding fasteners) as estimated in good faith by the contractor, constitutes less than 5 percent of the cost of all components used in such construction material (produced in the United States means that all manufacturing processes of the iron or steel must take place in the United States, except metallurgical processes involving refinement of steel additives). Fastener means a hardware device that mechanically joins or affixes two or more objects together. Examples of fasteners are nuts, bolts, pins, rivets, nails, clips, and screws. * * * * * Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. * * * * * (b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy American, by providing a preference for domestic construction material. In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for construction material that is a COTS item, except that for construction material that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the construction material, excluding fasteners. (See FAR 12.505(a)(2)). In addition, the Contracting Officer has determined that the WTO GPA and Free Trade Agreements (FTAs) apply to this acquisition. Therefore, the Buy American restrictions are waived for designated country construction materials. * * * * * Alternate I (DATE) * * * (b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy American, by providing a preference for domestic construction material. In accordance with 41 U.S.C. 1907, the domestic content test of the Buy American statute is waived for construction material that is a COTS item, PO 00000 Frm 00033 Fmt 4702 Sfmt 4702 except that for construction material that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the construction material, excluding fasteners. (See FAR 12.505(a)(2)). In addition, the Contracting Officer has determined that the WTO GPA and all the Free Trade Agreements except the Bahrain FTA, NAFTA, and the Oman FTA apply to this acquisition. Therefore, the Buy American statute restrictions are waived for designated country construction materials other than Bahrainian, Mexican, or Omani construction materials. * * * * * ■ 27. Amend section 52.225–21 by— ■ a. Revising the date of the clause; ■ b. Removing from paragraph (b)(4)(i)(B) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place; ■ c. Removing from paragraph (c) heading ‘‘Section’’ and adding ‘‘section’’ in its place; and ■ d. In paragraph (d): ■ i. Removing from the first undesignated paragraph following the table ‘‘reponse’’ and adding ‘‘response’’ in its place; and ■ ii. Removing from the second undesignated paragraph following the table ‘‘*Include’’ and adding ‘‘[*Include’’ in its place. The revision reads as follows: 52.225–21 Required Use of American Iron, Steel, and Manufactured Goods—Buy American Statute—Construction Materials. * * * * * Required Use of American Iron, Steel, and Manufactured Goods—Buy American Statute—Construction Materials (DATE) * * * * * ■ 28. Amend section 52.225–22 by— ■ a. Revising the date of the provision; ■ b. Removing from paragraph (b) ‘‘offeror’’ and adding ‘‘Offeror’’ in its place wherever it appears; ■ c. Removing from paragraph (c)(1)(ii) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place; ■ d. Removing from paragraph (c)(3) ‘‘offeror’’ and adding ‘‘Offeror’’ in its place; and ■ e. Removing from paragraphs (d)(1), (2), and (3) introductory text ‘‘offeror’’ and adding ‘‘Offeror’’ in their places, respectively. The revision reads as follows: 52.225–22 Notice of Required Use of American Iron, Steel, and Manufactured Goods—Buy American Statute— Construction Materials. * E:\FR\FM\14SEP1.SGM * * 14SEP1 * * Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Proposed Rules Notice of Required Use of American Iron, Steel, and Manufactured Goods— Buy American Statute—Construction Materials (DATE) DEPARTMENT OF COMMERCE * * * * * 29. Amend section 52.225–23 by— ■ a. Revising the date of the clause; and ■ b. Removing from paragraph (b)(4)(i)(B) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place. The revision reads as follows: 50 CFR Part 600 52.225–23 Required Use of American Iron, Steel, and Manufactured Goods—Buy American Statute—Construction Materials Under Trade Agreements. AGENCY: ■ * * * * * Required Use of American Iron, Steel, and Manufactured Goods—Buy American Statute—Construction Materials Under Trade Agreements (DATE) * * * * * 30. Amend section 52.225–24 by— ■ a. Revising the date of the provision; ■ b. Removing from paragraph (b) ‘‘offeror’’ and adding ‘‘Offeror’’ in its place wherever it appears; ■ c. Removing from paragraph (c)(1)(ii) ‘‘6 percent’’ and adding ‘‘20 percent’’ in its place; ■ d. Removing from paragraph (c)(3) ‘‘offeror’’ and adding ‘‘Offeror’’ in its place; and ■ e. Removing from paragraphs (d)(1), (2), and (3) introductory text ‘‘offeror’’ and adding ‘‘Offeror’’ in their places, respectively. The revision reads as follows: ■ 52.225–24 Notice of Required Use of American Iron, Steel, and Manufactured Goods—Buy American Statute— Construction Materials Under Trade Agreements. * * * * * Notice of Required Use of American Iron, Steel, and Manufactured Goods— Buy American Statute—Construction Materials Under Trade Agreements (DATE) khammond on DSKJM1Z7X2PROD with PROPOSALS * * * * * [FR Doc. 2020–20116 Filed 9–11–20; 8:45 am] BILLING CODE 6820–EP–P VerDate Sep<11>2014 16:50 Sep 11, 2020 Jkt 250001 National Oceanic and Atmospheric Administration [RTID 0648–XA356] Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Pacific Coast Groundfish Fishery; Application for an Exempted Fishing Permit National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notification; request for comments. NMFS announces the receipt of an exempted fishing permit application titled, ‘‘Year-round Coastwide Midwater Rockfish EFP: Monitoring and Minimizing Salmon Bycatch When Targeting Rockfish in the Shorebased IFQ Fishery, 2021–2022.’’ The application, submitted by the West Coast Seafood Processors Association, Environmental Defense Fund, Oregon Trawl Commission, and Midwater Trawlers Cooperative, requests a permit to test whether removing certain gear, time, and area restrictions for vessels fishing under the West Coast Groundfish Trawl Rationalization Program’s Shorebased Individual Fishing Quota Program may impact the nature and extent of bycatch of prohibited species (e.g., Chinook salmon). This exempted fishing permit would allow participating groundfish bottom and midwater trawl vessels more flexibility than allowed in current regulations to target pelagic rockfish species, such as widow, chilipepper, and yellowtail rockfish. Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on applications for proposed exempted fishing permits. DATES: Comments must be received no later than 5 p.m., local time on September 29, 2020. ADDRESSES: You may submit comments on this document, identified by NOAA– NMFS–2020–0097, by the following method: • Electronic Submissions: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to www.regulations.gov/ #!docketDetail;D=NOAA-NMFS-20200097, click the ‘‘Comment Now!’’ icon, complete the required fields, and enter SUMMARY: PO 00000 Frm 00034 Fmt 4702 Sfmt 4702 56569 or attach your comments. The EFP application will be available under ‘‘Supporting and Related Materials’’ through the same link. Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and would generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender would be publicly accessible. NMFS would accept anonymous comments (enter ‘‘N/A’’ in the required fields if you wish to remain anonymous). Attachments to electronic comments would be accepted in Microsoft Word, Excel, or Adobe PDF file formats only. FOR FURTHER INFORMATION CONTACT: Lynn Massey, West Coast Region, NMFS, at (562) 436–2462, lynn.massey@ noaa.gov. SUPPLEMENTARY INFORMATION: This action is authorized by the Pacific Coast Groundfish Fishery Management Plan (FMP) and regulations at 50 CFR 600.745, which allow NMFS Regional Administrators to authorize exempted fishing permits (EFPs) to test fishing activities that would otherwise be prohibited. At the June 2020 Pacific Fishery Management Council (Council) meeting, the Council voted to recommend that NMFS approve an EFP application titled, ‘‘Year-round Coastwide Midwater Rockfish EFP: Monitoring and Minimizing Salmon Bycatch When Targeting Rockfish in the Shorebased IFQ Fishery, 2021–2022’’ (herein referred to as the ‘‘2021 Trawl Gear EFP’’) for the 2021 fishing year, and made the preliminary decision to recommend continuing the EFP project in 2022. The applicants (i.e., the West Coast Seafood Processors Association, Environmental Defense Fund, Oregon Trawl Commission, and Midwater Trawlers Cooperative) submitted the application as a renewal request to continue EFP research conducted since 2017; the multi-year EFP project is collectively referred to as the ‘‘Trawl Gear EFP.’’ The Trawl Gear EFP project allows up to 60 vessels participating in the West Coast Groundfish Trawl Rationalization Program’s Limited Entry Shorebased Individual Fishing Quota (IFQ) Program to test whether removing certain gear, time, and area restrictions may impact the nature and extent of bycatch of protected and prohibited E:\FR\FM\14SEP1.SGM 14SEP1

Agencies

[Federal Register Volume 85, Number 178 (Monday, September 14, 2020)]
[Proposed Rules]
[Pages 56558-56569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20116]



[[Page 56558]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 25, and 52

[FAR Case 2019-016; Docket No. FAR-2019-0016, Sequence No. 1]
RIN 9000-AN99


Federal Acquisition Regulation: Maximizing Use of American-Made 
Goods, Products, and Materials

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

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement an Executive order (E.O.) 
addressing domestic preferences in Government procurement.

DATES: Interested parties should submit written comments at the address 
shown below on or before November 13, 2020 to be considered in the 
formation of the final rule.

ADDRESSES: Submit comments in response to FAR Case 2019-016 to https://www.regulations.gov. Submit comments via the Federal eRulemaking portal 
by searching for ``FAR Case 2019-016''. Select the link ``Comment Now'' 
that corresponds with ``FAR Case 2019-016.'' Follow the instructions 
provided on the screen. Please include your name, company name (if 
any), and ``FAR Case 2019-016'' on your attached document. If your 
comment cannot be submitted using https://www.regulations.gov, call or 
email the points of contact in the FOR FURTHER INFORMATION CONTACT 
section of this document for alternate instructions.
    Instructions: Please submit comments only and cite ``FAR Case 2019-
016'' in all correspondence related to this case. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal and/or business confidential information provided. To 
confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement 
Analyst, at 202-969-7207 or zenai[email protected] for clarification 
of content. For information pertaining to status or publication 
schedules, contact the Regulatory Secretariat Division at 202-501-4755 
or [email protected]. Please cite FAR Case 2019-016.

SUPPLEMENTARY INFORMATION:

I. Background

    Congress passed the Buy American Act during the Great Depression to 
foster American industry by protecting it from foreign competition for 
Federal procurement contracts. The Buy American Act is codified at 41 
U.S.C. Chapter 83 as the Buy American statute and provides pricing 
preferences to offerors who certify their compliance with the domestic 
purchasing requirements stated in the Act. Specifically, it requires 
public agencies to procure articles, materials, and supplies that were 
mined, produced, or manufactured in the United States, substantially 
all from domestic components, subject to exceptions for nonavailability 
of domestic products, unreasonable cost of domestic products, and when 
it would not be in the public interest to buy domestic products.
    The key to understanding the Buy American statute, which is 
implemented in FAR part 25, is determining whether the solicited goods 
or ``end products'' or ``construction material'' are domestic, i.e., 
were mined, produced, or manufactured in the United States, 
substantially from components mined, produced, or manufactured in the 
United states. The analysis of whether a manufactured end product or 
construction material qualifies as domestic is done using a two-part 
test.
    1. The end product or construction material must be manufactured in 
the United States.
    2. More than 50 percent of all component parts (determined by cost 
of the components) must also be mined, produced, or manufactured in the 
United States.
    The factor of 50 percent in the existing FAR definition came from 
E.O. 10582, Prescribing Uniform Procedures for Certain Determinations 
under the Buy American Act, available via the internet at https://www.archives.gov/federal-register/codification/executive-order/10582.html. E.O. 10582 interpreted the statutory requirement that 
domestic products must be manufactured ``substantially all'' from 
domestic components as meaning in excess of 50 percent. If a product 
meets this two-part test, then it can be considered a ``domestic end 
product'' or ``domestic construction material'' under the Buy American 
statute. End products or construction material that do not qualify as 
domestic under this test are treated as foreign.
    The Buy American statute is waived in situations where the United 
States has reciprocal trade agreements, including the World Trade 
Organization Government Procurement Agreement (WTO GPA). Generally, the 
dollar value of the acquisition determines which of the trade 
agreements applies. Exceptions to the applicability of the trade 
agreements are described in FAR subpart 25.4. The FAR clauses 
implementing the Trade Agreements Act allow the Government to purchase 
end items that are ``substantially transformed'' in countries that are 
parties to such trade agreements without regard to the source or cost 
of the components. On acquisitions under the WTO GPA, end products that 
are ``substantially transformed'' in the United States are considered 
``U.S.-made end products'' and they are not subject to the Buy American 
statute or E.O. 13881.
    On July 15, 2019, the President signed E.O. 13881, Maximizing Use 
of American-Made Goods, Products, and Materials (84 FR 34257, July 18, 
2019). This E.O. changes FAR clauses implementing the Buy American 
statute by increasing the--
    1. Domestic content requirements; and
    2. Price preference for domestic products.

Increased Domestic Content Requirements

    Under E.O. 13881, the domestic content requirement for iron and 
steel end products increases to 95 percent. For everything else, the 
domestic content requirement increases from 50 percent to exceeds 55 
percent of the cost of all components. E.O. 13881 creates a new 
separate higher domestic content standard for iron and steel end 
products. This distinction does not currently appear in the FAR clauses 
implementing the Buy American statute. But it has been around for many 
years in domestic preference requirements governing certain federal 
grant programs, such as the Federal Transit Administration's Buy 
America regulations applicable to grantees. DoD procurements are 
affected by the increased domestic content requirements of E.O. 13881; 
the changes will be implemented in the Defense Federal Acquisition 
Regulation Supplement (DFARS) through DFARS Case 2019-D045, Maximizing 
Use of American-Made Goods.

[[Page 56559]]

Increase Preference for Domestic Offers

    The Buy American statute does not prohibit the purchase of foreign 
end products or use of foreign construction material. Instead, it 
encourages the use of domestic end products and construction material 
by imposing a price preference for domestic end products and 
construction material. Under current Buy American regulations, large 
businesses receive a 6 percent price preference. Small businesses get a 
12 percent price preference. For DoD procurements, the price preference 
for end products from both large and small businesses is 50 percent. 
The 6 percent price preference was originally established by E.O. 
10582, which permitted the head of an executive agency to determine 
that a greater differential is appropriate. In October 1958, the 
Assistant Secretary of Defense (Supply and Logistics) and the Assistant 
Secretary of State agreed that a differential of 12 percent would be 
used for offers from small business (see Armed Services Procurement 
Regulation (ASPR), 1955 edition, Revision 45, 20 April 1959, Case 58-
99).
    E.O. 13881 increases the price preference from 6 percent to 20 
percent for large businesses and from 12 percent to 30 percent for 
small businesses. The E.O. does not impact the 50 percent preference 
for DoD procurements, because the DoD percentage exceeds the 
requirements of the E.O.

II. Discussion and Analysis

A. Applicability of the Executive Order 13881 to Construction Material

    Although the E.O. addresses only ``end products'' in section 2, the 
Councils have interpreted the term ``end product'' in the E.O. to 
include ``construction material.'' The E.O. doesn't define the term end 
product, but in both the title and section 1, addresses maximizing the 
use of American-made goods, products, and materials, not just end 
products. Furthermore, section 3 of the E.O. states that it will 
supersede section 2(a) of E.O. 10582, which addressed ``materials,'' 
and has been interpreted in the FAR to cover both end products and 
construction materials. In addition, the policy relating to iron and 
steel products has primary impact on the acquisition of construction 
materials. The Recovery Act applied the restrictions on acquisition of 
domestic iron and steel products solely to construction materials (see 
FAR subpart 25.6). Not addressing construction material in this rule 
would be contrary to the goal of the E.O. to maximize the use of 
American-made products.

B. Definitions

    1. This rule proposes to amend the definitions of ``domestic 
construction material'' and ``domestic end product'' at FAR 25.003 and 
in the applicable clauses at FAR 52.225-1, 52.225-3, 52.225-9, and 
52.225-11, and references at FAR 52.212-3(f)(1) and (g)(1)(iii), 
52.225-2(a), and 52.225-4(c), as well as the policy discussion of these 
definitions at FAR 25.001(c)(1), 25.101(a)(2), and 25.201(b), to 
include the new E.O. requirement that for ``domestic construction 
material'' or a ``domestic end product'' that does not consist wholly 
or predominantly of iron or steel or a combination of both, the cost of 
domestic components must exceed 55 percent of the cost of all 
components.
    2. A new paragraph is added in each definition to address end 
products or construction materials that consist wholly or predominantly 
of iron or steel or a combination of both, respectively, to require 
that the cost of iron and steel not produced in the United States as 
estimated in good faith by the contractor, must constitute less than 5 
percent of the cost of all components. This addition to the definitions 
was derived and integrated with existing FAR coverage as follows:
    a. Iron and steel end product means an end product or construction 
material that consists wholly or predominantly of iron or steel or a 
combination of both.
    b. Predominantly of iron or steel or a combination of both means 
the cost of the iron and steel content in an item that exceeds 50 
percent of the total cost of all its components. Basing the 
predominance on cost, rather than weight, is consistent with the 
requirement of the E.O. that the foreign iron and steel content be 
limited to less than 5 percent of the cost of all components.
    c. Foreign iron and steel means iron and steel not produced in the 
United States. This is consistent with the definition of ``foreign iron 
and steel'' under the Recovery Act (see FAR 25.602-1(a)(1)(ii)).
    d. When addressing construction materials or end products that are 
wholly or predominantly iron or steel or a combination of both, it is 
unnecessary to address unmanufactured construction material or 
unmanufactured end products, respectively, because the Government does 
not buy unmanufactured iron and steel end products and construction 
materials.
    e. ``Produced in the United States'' is taken from FAR subpart 
25.6, and applies to the iron and steel in construction material and 
end products that consist wholly or predominantly of iron or steel or a 
combination of both.
    f. The definition of ``steel'' is taken from FAR subpart 25.6.
    g. Because of the difficulty of estimating the cost of all foreign 
iron and steel content, the rule proposes a good faith estimate by the 
contractor, with the exception of fasteners, which, as explained in 
section II.C., are defined and treated separately.
    h. The requirement that components of unknown origin be treated as 
foreign has been incorporated into the definitions of ``domestic end 
product'' and ``domestic construction material'' for those items that 
do not consist wholly or predominantly of iron or steel or a 
combination of both. This requirement is comparable to the other 
requirements already in the definition such as the treatment of 
domestically nonavailable components and scrap generated in the United 
States as domestic. This makes it clearer that this is only applicable 
to items that do not consist wholly or predominantly of iron or steel 
or a combination of both.
    i. The rule revises the term ``component test'' to ``domestic 
content test,'' which can apply to either the component content of 
other than iron or steel products test, or the iron and steel content 
of iron or steel products, as applicable. With regard to manufactured 
supplies and materials (whether end products or construction 
materials), the Buy American statute requires that in order to be 
considered domestic, such materials and supplies shall have been 
manufactured in the United States ``substantially all from articles, 
materials, or supplies mined produced, or manufactured in the United 
States.''
    E.O. 10582 interpreted this requirement by stating that materials 
shall be considered to be of foreign origin if the cost of foreign 
products used in such materials constitutes 50 percent or more of the 
cost of all the products used in such materials. When incorporated into 
the FAR, the term ``component'' was substituted for the term 
``product'' and this has been referred to as the ``component test''. 
Although E.O. 13881 retains similar language with regard to end 
products other than iron and steel end products, just changing the 
percentage from 50 percent to 45 percent, E.O. 13881 does not reference 
the term ``product'' when referring to the cost of iron and steel used 
in iron and steel end products. It states that ``the cost of foreign 
iron and steel used in such iron and steel end products constitutes 5 
percent or more of the cost of all the products used in such iron and 
steel end products.'' Thus, the test for iron and steel is no

[[Page 56560]]

longer a ``component test'' but a test of the cost of iron and steel 
content.

C. Partial Reinstatement of the Domestic Content Test of the Buy 
American Statute for Iron and Steel Products

    In 2009, the Administrator for Federal Procurement Policy waived 
what is now called the domestic content test (previously called the 
component test) for commercially available off-the-shelf (COTS) items 
based on a determination made pursuant to 41 U.S.C. 1907. See FAR Case 
2000-305, January 15, 2009, 74 FR 2713. Furtherance of the Buy American 
statute was driven by retention of the requirement that the product 
must still be manufactured in the United States.
    The proposed rule would partially restore the domestic content test 
for COTS items as it pertains to iron and steel products. The bulk of 
iron and steel products acquired by the Government are primarily COTS 
items, used as construction material. Roll-back of the waiver is 
necessary to give full effect to the E.O.'s requirement that domestic 
iron and steel products shall not contain more than 5 percent foreign 
iron and steel.
    At the same time, the proposed rule would continue to waive the 
domestic content test for iron and steel fasteners. Fastener is defined 
as a hardware device that mechanically joins or affixes two or more 
objects together. Examples of fasteners are nuts, bolts, pins, rivets, 
nails, clips, and screws. Fasteners are generally so small, inexpensive 
and comingled that trying to keep track of the origin of all fasteners 
would create an administrative burden that would outweigh any benefit 
to the American iron and steel industrial base. The proposed partial 
reinstatement of the domestic content test for products that consist 
wholly or predominantly of iron or steel or a combination of both would 
require changes to the list of inapplicable laws at FAR 12.505(a), the 
definitions of ``domestic construction material'' and ``domestic end 
product,'' and various other conforming changes wherever waiver of the 
now domestic content test is mentioned (FAR 25.001(c)(1), 25.100(a)(4), 
25.101(a)(2), 25.200(a)(4), 25.201(b)(2), 52.225-1(b), 52.225-3(c), 
52.225-9(b), and 52.225-11(b)).

D. Evaluation Factor for Determination of Unreasonable Cost

    The new E.O. also increases the evaluation factors to be applied to 
offers of foreign end products or construction material when 
determining whether the cost of offered domestic end products or 
construction material is unreasonable. For acquisitions of end 
products, the factor of 20 percent is to be applied to a foreign offer 
if the potential domestic awardee is other than a small business, and a 
30 percent factor is to be applied if the potential awardee would be a 
small business (see FAR 25.105(b), 25.204, 25.502(c), 25.604, 25.605, 
52.225-9(b)(3)(i), 52.225-11((b)(4)(i), and the Recovery Act clauses at 
52.225-21 through 52.225-24). Consistent with current FAR coverage for 
acquisitions of foreign construction material under a construction 
contract, the higher preference for small businesses is inapplicable, 
because under a construction contract, there are not separately 
identifiable offers on each item of construction material, but it is 
part of an overall bid on the project. The foreign material is 
evaluated on the basis of market research, not a specific competing 
offer. Thus, only the 20 percent factor would be applied to 
construction material.

E. Applicability to Acquisitions Funded by the Recovery Act

    Projects funded with monies from section 1605 of the American 
Recovery and Reinvestment Act of 2009 (the Recovery Act) (Pub. L. 111-
5) are subject to more stringent requirements for use of domestic 
manufactured construction material, particularly iron and steel (see 
FAR subpart 25.6). The Recovery Act restrictions apply only to 
construction projects using funds appropriated under that Act. Most of 
those funds have now been obligated and expended, and there is very 
little continued applicability of these regulations.
    The Recovery Act does not apply to unmanufactured construction 
material, which is therefore still covered by the Buy American statute. 
The increased requirements of the new E.O. for domestic content for 
manufactured construction material are therefore inapplicable to 
acquisitions under the Recovery Act.
    However, the 20 percent factor that applies to construction 
contracts covered by the Buy American statute, only applies to the 
unmanufactured construction material of a construction contract 
otherwise covered by the Recovery Act. Accordingly, the 6 percent 
factor is revised to 20 percent at FAR 25.604(c)(2) and 25.605 and in 
the following Recovery Act provisions and clause:
    52.225-21, Required Use of American Iron, Steel, and Manufactured 
Goods--Buy American Statute--Construction Materials.
    52.225-22, Notice of Required Use of American Iron, Steel, and 
Manufactured Goods--Buy American Statute--Construction Materials.
    52.225-23, Required Use of American Iron, Steel, and Manufactured 
Goods--Buy American Statute--Construction Materials Under Trade 
Agreements.
    52.225-24, Notice of Required Use of American Iron, Steel, and 
Manufactured Goods--Buy American Statute--Construction Materials Under 
Trade Agreements.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Items, Including Commercially 
Available Off-the-Shelf (COTS) Items

    This proposed rule does not add any new provisions or clauses, nor 
change the applicability of existing provisions or clauses to contracts 
at or below the SAT and contracts for the acquisition of commercial 
items, including COTS items.
    However, this rule does propose to apply the domestic content test 
of the Buy American statute, as implemented by E.O. 13881, to COTS 
items that consist wholly or predominantly of iron and steel (excluding 
fasteners). In accordance with 41 U.S.C. 1907, since 2008, the domestic 
content test of the Buy American statute has been waived for COTS 
items, in part due to the complexity and cost of keeping track of 
components in a world of global sourcing where the Government is not a 
market driver. However, the domestic content test for the iron and 
steel items does not require tracking of all components, only a good 
faith assurance that not more than 5 percent of the iron and steel 
content is foreign. In addition, absent restoration of the domestic 
content test, the E.O. 13881 requirement with regard to iron and steel 
construction material would have very little effect.
    As explained above, the domestic content waiver for COTS items 
would continue to apply to iron and steel fasteners, such as nuts, 
bolts, pins, rivets, nails, clips, and screws, which are generally so 
small, inexpensive and comingled that trying to keep track of the 
origin of all fasteners would create an administrative burden that 
would outweigh any benefit to the American iron and steel industrial 
base.

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

[[Page 56561]]

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.

V. Expected Impact of the Proposed Rule

    The current FAR clauses implementing the Buy American statute apply 
to a narrow set of procurements. Also, because the FAR Council is 
leaving the COTS items exception in place for most COTS items, the 
heightened domestic content requirements will not be applicable to 
those procurements.
    When this rule is implemented, domestic industries supplying 
domestic end products are likely to benefit from a competitive 
advantage. Based on the E.O., it is unclear if the pool of qualified 
suppliers would be reduced, resulting in less competition (and a 
possible increase in prices that the Government will pay to procure 
these products).
    At least three arguments point to the possibility that any 
increased burden, on contractors in particular, could be small if not 
de minimis: (1) Familiarization costs should be low, (2) some, if not 
many, contractors may already be able to meet the more stringent 
threshold, and (3) costs incurred by contractors who adjust their 
supply chains so that their end products qualify as domestic will enjoy 
a larger price preference that should help to offset these costs over 
time. Each of these arguments is explained below.
    First, DoD, GSA, and NASA do not anticipate significant cost from 
contractor familiarization with the rule given the history of 
rulemaking and E.O.s in this area. The basic mechanics of the Buy 
American statute (e.g., definitions, how and when the price preference 
is used to favor domestic end products, certifications required of 
offerors to demonstrate end products are domestic) remain unchanged and 
continue to reflect processes that are decades old.
    Second, some, if not many, contractors may already be able to 
comply with the lower foreign content requirement needed to meet the 
definition of domestic end product under E.O. 13881 and the proposed 
rule. Laws such as the SECURE Technology Act, Public Law 115-390, which 
requires a series of actions to strengthen the Federal infrastructure 
for managing supply chain risks, are placing significantly increased 
emphasis on Federal agencies and Federal Government contractors to 
identify and reduce risk in their supply chains. One way to reduce 
supply chain risk is to increase domestic sourcing of content. In 
addition, in the context of iron and steel, many laws already in place 
call for more stringent content. For example, the Recovery Act required 
that all construction material for a project for the construction, 
alteration, maintenance, or repair of a public building or a public 
work in the United States, consisting wholly or predominantly of iron 
or steel, had to be produced in the United States when using Recovery 
Act funds, to the extent consistent with trade agreements (see FAR 
25.602-1, implementing section 1605 of the Recovery Act). In addition, 
Federal contractors who also work on contracts funded under Federal 
grants may, in some cases, find that the steel, iron, and manufactured 
goods used in the project be produced in the United States, as is the 
case for certain funding administrated by the Federal Transit 
Administration for public transportation projects (see 49 U.S.C. 
5323(j)). Accordingly, it is possible that the Federal market for iron 
and steel has already done significant retooling and could meet the 
requirements of E.O. 13881 without too much additional effort.
    Third, it is anticipated that some contractors' products and 
construction materials may not meet the definition of domestic end 
product and construction material unless the contractors take steps to 
adjust their supply chains to increase the domestic content. Those 
contractors that make a business decision not to modify their supply 
chains will still be able to bid on Federal contracts but will no 
longer enjoy a price preference. Those contractors that sell to 
civilian agencies and retool their supply sources to meet the more 
stringent threshold will have a more generous price preference applied 
to their products--i.e., 20 percent generally under the new rule vs. 6 
percent under the current rule; 30 percent if the seller is a small 
business vs. 12 percent under the current rule. These stronger 
preferences, which are designed as an incentive to encourage more 
domestic sourcing, may help to offset costs of meeting the new 
standards.
    This rule has the potential to slightly increase the estimated 
percentage of foreign offers. It can only impact products that are made 
in the United States as follows: Iron or steel that has a content of 5 
percent or more of foreign iron or steel; or other products, other than 
COTS items, that have a content of 45 to 50 percent foreign components. 
Offerors of such products have an option to increase the domestic 
content and continue to offer domestic products, in which case they may 
benefit from the increased preference for domestic products, or they 
may choose to continue to offer the same product, which will now be 
evaluated as foreign. We do not have any data on how many currently 
domestic products would fall into this category. Nor do we have any 
knowledge as to which option an offeror of such products would select. 
With regard to the increased price preference for domestic offers, we 
note that robust competition among vendors offering domestic products 
will decrease the extent to which the Government could pay an 
additional 20 to 30 percent for domestic products above and beyond the 
cost of otherwise equivalent foreign products.
    DoD, GSA, and NASA do not expect a significant cost impact on the 
public but lack data to make a definitive determination and seek 
information from the public to assist with this analysis. Feedback is 
requested on the following questions:
    (1) What industry do you represent? Are you a manufacturer or a 
reseller?
    (2) For manufacturers and resellers of end products other than iron 
and steel--
    (a) Do you currently meet the higher standards specified in the 
proposed rule for a domestic end product or construction material or 
would you have to make adjustments to your supply chain to meet the new 
requirements?
    (b) If you would have to make adjustments to your supply chain in 
response to changes proposed here, do you plan to do so?
    (c) If the answer to question (b) is yes, how much do you think it 
will cost to make these changes, and to what extent do you believe this 
cost will be offset by the increased preference applicable to purchases 
by civilian agencies if you move toward products with higher domestic 
content?
    (3) For sellers of iron and steel, what, if any, adjustments do you 
anticipate having to make to your supply chain to meet the new 
requirements, and how much do acquisition costs vary between iron and 
steel with less or equal than 95 percent domestic content, and greater 
than 95 percent domestic content?
    (4) Section 4 of E.O. 13881 directed consideration of the 
``feasibility and desirability'' of further decreases in the threshold 
percentage of foreign content allowed for an end product other than

[[Page 56562]]

iron or steel to be considered domestic from the 45 percent proposed in 
this rule to 25 percent. Accordingly, DoD, GSA, and NASA encourage 
manufacturers and resellers of end products other than iron and steel 
to provide input on the feasibility and desirability of adopting this 
more stringent standard by addressing the following--
    (a) Could you currently meet a 25 percent foreign content 
requirement for domestic end products or construction material or would 
you have to make adjustments to your supply chain to do so?
    (b) If you would have to make adjustments to your supply chain to 
meet a 25 percent requirement, would you do so?
    (c) If the answer to question (b) is yes, how much do you think it 
would cost to come into compliance, how much would acquisition costs 
for these materials rise, and to what extent do you believe this cost 
would be offset by the increased preference applicable to purchases by 
civilian agencies?
    (d) Do you think it is preferable to work towards a 25 percent 
threshold incrementally? If so, why and what incremental change would 
you propose over what period of time?

VI. Executive Order 13771

    DoD, GSA, and NASA do not expect this to be considered a regulatory 
action under E.O. 13771, Reducing Regulation and Controlling Regulatory 
Costs, because this rule is expected to have a de minimis burden impact 
on the public (see section V of this preamble).

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this 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 this rule does not impose new requirements just changes to the 
existing percentages. This rule proposes to make adjustments to the 
required percentage of domestic content and the existing percentages 
for the price evaluation preferences in an effort to decrease the 
amount of foreign-sourced content in a U.S. manufactured product to 
promote economic and national security, help stimulate economic growth, 
and create jobs.
    Nevertheless, an Initial Regulatory Flexibility Analysis (IRFA) has 
been performed and summarized as follows:

    This case amends the FAR to implement an Executive order 
regarding maximizing the use of American-made goods, products, and 
materials.
    The objective of this proposed rule is to strengthen domestic 
preferences under the Buy American statute, as required by E.O. 
13881, by changing how a domestic product is defined and how the 
price of a domestic product is determined to be unreasonable.
    In accordance with Federal Procurement Data System data for 
fiscal years (FY) 2017, 2018, and 2019 for new awards with foreign 
place of performance for construction valued over the micro-purchase 
threshold and awards for supplies to unique small businesses; this 
rule will apply to only the 8 percent of foreign construction awards 
which were made to small businesses and, only 14 percent of foreign 
supply awards were made to small businesses.

----------------------------------------------------------------------------------------------------------------
                                              FY 2017            FY 2018            FY 2019           Median
          Buy American statute          ------------------------------------------------------------------------
                                              SB/Total           SB/Total           SB/Total           SB %
----------------------------------------------------------------------------------------------------------------
Construction...........................        18/217 = 8%        13/223 = 6%        15/199 = 8%              8%
Supplies...............................     153/1,200 = 13     164/1,161 = 14     164/1,048 = 16              14
----------------------------------------------------------------------------------------------------------------

    This rule is covered under the existing information collection 
requirements associated with the Buy American statute. The rule will 
strengthen domestic preferences under the Buy American statute and 
provide small businesses the opportunity and incentive to deliver 
U.S. manufactured products from domestic suppliers. It is expected 
that this rule will benefit U.S. small business manufacturers, 
including those of iron or steel.
    This rule does not duplicate, overlap, or conflict with any 
other Federal rules.
    DoD, GSA, and NASA were unable to identify any significant 
alternatives.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained for the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C 610 (FAR Case 2019-016), in 
correspondence.

VIII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply; 
however, these changes to the FAR do not impose additional information 
collection requirements to the paperwork burden previously approved 
under the Office of Management and Budget Control Number 9000-0024, Buy 
American, Trade Agreements, and Duty-Free Entry- FAR Sections Affected: 
52.225-2; 52.225-4, 52.225-6, 52.225-8 thru 52.225-12, and 52.225-21 & 
52.225-23.

List of Subjects in 48 CFR Parts 12, 25, and 52

    Government procurement.

William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 12, 25, 
and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 12, 25, and 52 continues to 
read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

0
2. Amend section 12.505 by revising paragraph (a) to read as follows:


12.505  Applicability of certain laws to contracts for the acquisition 
of COTS items.

* * * * *
    (a)(1) The portion of 41 U.S.C. 8302, American Materials Required 
for Public Use, paragraph (a)(1) that reads ``substantially all from 
articles, materials, or supplies mined, produced, or manufactured in 
the United States,'' Buy American--Supplies, domestic content test, 
except as provided in 25.101(a)(2)(ii) (see 52.225-1 and 52.225-3).
    (2) The portion of 41 U.S.C. 8303, Contracts for Public Works, 
paragraph (a)(2) that reads ``substantially all from articles, 
materials, or supplies mined, produced, or manufactured in the United 
States,'' Buy American--Construction Materials, domestic content test, 
except as provided in 25.201(b)(2)(ii)(see 52.225-9 and 52.225-11).
* * * * *

[[Page 56563]]

PART 25--FOREIGN ACQUISITION

0
3. Amend section 25.001 by revising paragraph (c)(1) to read as 
follows:


25.001  General.

* * * * *
    (c) * * *
    (1) The Buy American statute uses a two-part test to define a 
``domestic end product'' or ``domestic construction material'' 
(manufactured in the United States and a domestic content test). The 
domestic content test has been waived for acquisition of commercially 
available off-the-shelf items, except a product that consists wholly or 
predominantly of iron or steel or a combination of both (excluding 
fasteners) (see 25.101(a) and 25.201(b)).
* * * * *
0
4. Amend section 25.003 by--
0
a. Revising the definitions ``Domestic construction material'' and 
``Domestic end product''; and
0
b. Adding in alphabetical order the definitions ``Fastener'', 
``Predominantly of iron or steel or a combination of both'', and 
``Steel''.
    The revisions and additions read as follows:


25.003  Definitions.

* * * * *
    Domestic construction material means--
    (1) For use in subparts other than 25.6--
    (i) For construction material that does not consist wholly or 
predominantly of iron or steel or a combination of both--
    (A) An unmanufactured construction material mined or produced in 
the United States; or
    (B) A construction material manufactured in the United States, if--
    (1) The cost of the components mined, produced, or manufactured in 
the United States exceeds 55 percent of the cost of all its components. 
Components of foreign origin of the same class or kind for which 
nonavailability determinations have been made are treated as domestic. 
Components of unknown origin are treated as foreign; or
    (2) The construction material is a COTS item; or
    (ii) For construction material that consists wholly or 
predominantly of iron or steel or a combination of both, a construction 
material manufactured in the United States if the cost of iron and 
steel not produced in the United States (excluding fasteners) as 
estimated in good faith by the contractor, constitutes less than 5 
percent of the cost of all the components used in such construction 
material (produced in the United States means that all manufacturing 
processes of the iron or steel must take place in the United States, 
except metallurgical processes involving refinement of steel 
additives); or
    (2) For use in subpart 25.6, see the definition in 25.601.
    Domestic end product means--
    (1) For an end product that does not consist wholly or 
predominantly of iron or steel or a combination of both--
    (i) An unmanufactured end product mined or produced in the United 
States;
    (ii) An end product manufactured in the United States, if--
    (A) The cost of its components mined, produced, or manufactured in 
the United States exceeds 55 percent of the cost of all its components. 
Components of foreign origin of the same class or kind as those that 
the agency determines are not mined, produced, or manufactured in 
sufficient and reasonably available commercial quantities of a 
satisfactory quality are treated as domestic. Components of unknown 
origin are treated as foreign. Scrap generated, collected, and prepared 
for processing in the United States is considered domestic; or
    (B) The end product is a COTS item; or
    (2) For an end product that consists wholly or predominantly of 
iron or steel or a combination of both, an end product manufactured in 
the United States, if the cost of iron and steel not produced in the 
United States (excluding fasteners) as estimated in good faith by the 
contractor, constitutes less than 5 percent of the cost of all the 
components used in the end product (produced in the United States means 
that all manufacturing processes of the iron or steel must take place 
in the United States, except metallurgical processes involving 
refinement of steel additives).
* * * * *
    Fastener means a hardware device that mechanically joins or affixes 
two or more objects together. Examples of fasteners are nuts, bolts, 
pins, rivets, nails, clips, and screws.
* * * * *
    Predominantly of iron or steel or a combination of both means that 
the cost of the iron and steel content in an item exceeds 50 percent of 
the total cost of all its components.
    Steel means an alloy that includes at least 50 percent iron, 
between .02 and 2 percent carbon, and may include other elements.
* * * * *
0
5. Amend section 25.100 by--
0
a. Removing from the end of paragraph (a)(2) ``and'';
0
b. Redesignating paragraph (a)(3) as paragraph (a)(4);
0
c. Adding a new paragraph (a)(3); and
0
d. Revising the newly redesignated paragraph (a)(4).
    The addition and revision read as follows:


25.100  Scope of subpart.

    (a) * * *
    (3) Executive Order 13881, July 15, 2019; and
    (4) Waiver of the domestic content test of the Buy American statute 
for acquisition of commercially available off-the-shelf (COTS) items in 
accordance with 41 U.S.C. 1907, but see 25.101(a)(2)(ii).
* * * * *
0
6. Amend section 25.101 by--
0
a. Removing from paragraph (a) introductory text ``statute uses'' and 
adding ``statute and E.O. 13881 use'' in its place;
0
b. Revising paragraph (a)(2);
0
c. Removing from paragraph (b) ``component test'' and adding ``domestic 
content test'' in its place; and
0
d. Removing from paragraph (c) ``Subpart 25.5'' and adding ``subpart 
25.5'' in its place.
    The revision reads as follows:


25.101  General.

    (a) * * *
    (2)(i) Except for an end product that consists wholly or 
predominantly of iron or steel or a combination of both, the cost of 
domestic components must exceed 55 percent of the cost of all the 
components. In accordance with 41 U.S.C. 1907, this domestic content 
test of the Buy American statute has been waived for acquisitions of 
COTS items (see 12.505(a)) (but see paragraph (a)(2)(ii) of this 
section).
    (ii) For an end product that consists wholly or predominantly of 
iron or steel or a combination of both, the cost of iron and steel not 
produced in the United States (excluding fasteners) as estimated in 
good faith by the contractor, must constitute less than 5 percent of 
the cost of all the components used in the end product. This domestic 
content test of the Buy American statute has not been waived for 
acquisitions of COTS items in this category, except for fasteners.
* * * * *


25.105  [Amended]

0
7. Amend section 25.105 by--
0
a. Removing from paragraph (b)(1) ``6 percent'' and adding ``20 
percent'' in its place; and
0
b. Removing from paragraph (b)(2) ``12 percent'' and ``Subpart 19.5'' 
and adding ``30 percent'' and ``subpart 19.5'' in their places, 
respectively.

[[Page 56564]]

0
8. Amend section 25.200 by--
0
a. Removing from the end of paragraph (a)(2) ``and'';
0
b. Redesignating paragraph (a)(3) as paragraph (a)(4);
0
c. Adding a new paragraph (a)(3); and
0
d. Revising the newly redesignated paragraph (a)(4).
    The addition and revision read as follows:


25.200  Scope of subpart.

    (a) * * *
    (3) Executive Order 13881, July 15, 2019; and
    (4) Waiver of the domestic content test of the Buy American statute 
for acquisitions of commercially available off-the-shelf (COTS) items 
in accordance with 41 U.S.C. 1907, but see 25.201(b)(2)(ii).
* * * * *
0
9. Revise section 25.201 to read as follows:


25.201  Policy.

    (a) Except as provided in 25.202, use only domestic construction 
materials in construction contracts performed in the United States.
    (b) The Buy American statute restricts the purchase of construction 
materials that are not domestic construction materials. For 
manufactured construction materials, the Buy American statute and E.O. 
13881 use a two-part test to define domestic construction materials.
    (1) The article must be manufactured in the United States; and
    (2)(i) Except for construction material that consists wholly or 
predominantly of iron or steel or a combination of both, the cost of 
domestic components must exceed 55 percent of the cost of all the 
components. In accordance with 41 U.S.C. 1907, this domestic content 
test of the Buy American statute has been waived for acquisitions of 
COTS items (see 12.505(a)).
    (ii) For construction material that consists wholly or 
predominantly of iron or steel or a combination of both, the cost of 
iron and steel not produced in the United States (excluding fasteners) 
as estimated in good faith by the contractor, must constitute less than 
5 percent of the cost of all the components used in such construction 
material. This domestic content test of the Buy American statute has 
not been waived for acquisitions of COTS items in this category, except 
for fasteners.


25.204  [Amended]

0
10. Amend section 25.204 in paragraph (b) by removing ``6 percent'' and 
adding ``20 percent'' in its place.
0
11. Amend section 25.504-1 by--
0
a. Revising the table in paragraph (a)(1);
0
b. Removing from paragraph (a)(2) ``12 percent'' and ``$11,200'' and 
adding ``30 percent'' and ``$13,000'' in their places, respectively; 
and
0
c. Removing from paragraph (b)(2) ``12 percent'' and ``$11,424'' and 
adding ``30 percent'' and ``$13,260'' in their places, respectively.
    The revision reads as follows:


25.504-1   Buy American statute.

    (a)(1) * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Offer A....................    $16,000  Domestic end product, small
                                         business.
Offer B....................     15,700  Domestic end product, small
                                         business.
Offer C....................     10,000  U.S.-made end product (not
                                         domestic), small business.
------------------------------------------------------------------------

* * * * *
0
12. Amend section 25.504-2 by revising the table to read as follows:


25.504-2   WTO GPA/Caribbean Basin Trade Initiative/FTAs.

* * * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Offer A....................   $304,000  U.S.-made end product (not
                                         domestic).
Offer B....................    303,000  U.S.-made end product
                                         (domestic), small business.
Offer C....................    300,000  Eligible product.
Offer D....................    295,000  Noneligible product (not U.S.-
                                         made).
------------------------------------------------------------------------

* * * * *
0
13. Amend section 25.504-3 by--
0
a. Revising the entry ``Offer B'' in the table in paragraph (a);
0
b. Revising the entry ``Offer B'' in the table in paragraph (b); and
0
c. Revising entries ``Offer B'' and ``Offer C'' in the table in 
paragraph (c).
    The revisions read as follows:


25.504-3   FTA/Israeli Trade Act.

    (a) * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
                                * * * * *
Offer B....................   $100,000  Eligible product.
------------------------------------------------------------------------

* * * * *
    (b) * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
                                * * * * *
Offer B....................   $103,000  Noneligible product.
------------------------------------------------------------------------

* * * * *
    (c) * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
                                * * * * *
Offer B....................   $103,000  Eligible product.
Offer C....................    100,000  Noneligible product.
------------------------------------------------------------------------

* * * * *
0
14. Amend section 25.504-4 by--
0
a. In paragraph (a)--
0
i. Revising the table;
0
ii. In STEP 1, Items 3 and 5, removing ``6 percent'' and adding ``20 
percent'' in their places, respectively; and
0
iii. Revising STEP 2 and 3.
0
b. Revising paragraph (b).
    The revisions read as follows:


25.504-4   Group award basis.

    (a) * * *

----------------------------------------------------------------------------------------------------------------
                                                                                     Offers
                             Item                             --------------------------------------------------
                                                                      A                B                C
----------------------------------------------------------------------------------------------------------------
1............................................................     DO = $55,000     EL = $56,000   NEL = $50,000.
2............................................................     NEL = 13,000      EL = 10,000      EL = 13,000
3............................................................     NEL = 11,500      DO = 12,000      DO = 10,000
4............................................................     NEL = 24,000      EL = 28,000     NEL = 22,000
5............................................................      DO = 18,000     NEL = 10,000      DO = 14,000
                                                              --------------------------------------------------
    Total....................................................          121,500          116,000          109,000
----------------------------------------------------------------------------------------------------------------

* * * * *
    STEP 2: Evaluate Offer C against the tentative award pattern for 
Offers A and B:

[[Page 56565]]



----------------------------------------------------------------------------------------------------------------
                                                                             Offers
                                              ------------------------------------------------------------------
                     Item                                                       Tentative award
                                                          Low offer              pattern from A         C
                                                                                     and B
----------------------------------------------------------------------------------------------------------------
1............................................  A..............................     DO = $55,000          * NEL =
                                                                                                        $60,000.
2............................................  B..............................      EL = 10,000      EL = 13,000
3............................................  B..............................      DO = 12,000      DO = 10,000
4............................................  A..............................     NEL = 24,000     NEL = 22,000
5............................................  B..............................    *NEL = 12,000      DO = 14,000
                                                                               ---------------------------------
    Total....................................  ...............................          113,000          119,000
----------------------------------------------------------------------------------------------------------------
* Offer + 20 percent.

    On a line item basis, apply a factor to any noneligible offer if 
the other offer for that line item is domestic.
    For Item 1, apply a factor to Offer C because Offer A is domestic 
and the acquisition was not covered by the WTO GPA. The evaluated price 
of Offer C, Item 1, becomes $60,000 ($50,000 plus 20 percent). Apply a 
factor to Offer B, Item 5, because it is a noneligible product and 
Offer C is domestic. The evaluated price of Offer B is $12,000 ($10,000 
plus 20 percent). Evaluate the remaining items without applying a 
factor.
    STEP 3: The tentative unrestricted award pattern from Offers A and 
B is lower than the evaluated price of Offer C. Award the combination 
of Offers A and B. Note that if Offer C had not specified all-or-none 
award, award would be made on Offer C for line items 3 and 4, totaling 
an award of $32,000.
    (b) Example 2.

----------------------------------------------------------------------------------------------------------------
                                                                                     Offers
                             Item                             --------------------------------------------------
                                                                      A                B                C
----------------------------------------------------------------------------------------------------------------
1............................................................     DO = $50,000     EL = $50,500   NEL = $50,000.
2............................................................     NEL = 10,300     NEL = 10,000      EL = 10,200
3............................................................      EL = 20,400      EL = 21,000     NEL = 20,200
4............................................................      DO = 10,500      DO = 10,300      DO = 10,400
                                                              --------------------------------------------------
    Total....................................................           91,200           91,800           90,800
----------------------------------------------------------------------------------------------------------------

    Problem: The solicitation specifies award on a group basis. Assume 
the Buy American statute applies and the acquisition cannot be set 
aside for small business concerns. All offerors are large businesses.
    Analysis: (See 25.503(c))
    STEP 1: Determine which of the offers are domestic (see 
25.503(c)(1)):

------------------------------------------------------------------------
                            Domestic (percent)          Determination
------------------------------------------------------------------------
A.....................  $50,000 (Offer A1) +        Domestic.
                         $10,500 (Offer A4) =
                         $60,500.
                        $60,500/$91,200 (Offer A
                         Total) = 66.3%..
B.....................  $10,300 (Offer B4)/$91,800  Foreign.
                         (Offer B Total) = 11.2%.
C.....................  $10,400 (Offer C4)/$90,800  Foreign.
                         (Offer C Total) = 11.5%.
------------------------------------------------------------------------

    STEP 2: Determine whether foreign offers are eligible or 
noneligible offers (see 25.503(c)(2)):

------------------------------------------------------------------------
                            Domestic + eligible
                                 (percent)              Determination
------------------------------------------------------------------------
A.....................  N/A (Both Domestic).......  Domestic.
B.....................  $50,500 (Offer B1) +        Eligible.
                         $21,000 (Offer B3) +
                         $10,300 (Offer B4) =
                         $81,800.
                        $81,800/$91,800 (Offer B
                         Total) = 89.1%..
C.....................  $10,200 (Offer C2) +        Noneligible.
                         $10,400 (Offer C4) =
                         $20,600.
                        $20,600/$90,800 (Offer C
                         Total) = 22.7%..
------------------------------------------------------------------------

    STEP 3: Determine whether to apply an evaluation factor (see 
25.503(c)(3)). The low offer (Offer C) is a foreign offer. There is no 
eligible offer lower than the domestic offer. Therefore, apply the 
factor to the low offer. Addition of the 20 percent factor (use 30 
percent if Offer A is a small business) to Offer C yields an evaluated 
price of $108,960 ($90,800 + 20 percent). Award on Offer A (see 
25.502(c)(4)(ii)). Note that, if Offer A were greater than Offer B, an 
evaluation factor would not be applied, and award would be on Offer C 
(see 25.502(c)(3)).


25.601   [Amended]

0
15. Amend section 25.601 by removing the definition ``Steel''.

[[Page 56566]]

25.604   [Amended]

0
16. Amend section 25.604 in paragraph (c)(2) by removing ``6 percent'' 
and adding ``20 percent'' in its place.


25.605   [Amended]

0
17. Amend section 25.605 by--
0
a. Removing from paragraph (a)(2) ``6 percent'' and adding ``20 
percent'' in its place; and
0
b. Removing from paragraph (a)(3) ``.06'' and adding ``.20'' in its 
place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
18. Amend section 52.212-3 by--
0
a. Revising the date of the provision; and
0
b. Revising paragraphs (f)(1), (g)(1)(i), the first sentence of 
(g)(1)(ii), and (g)(1)(iii) introductory text.
    The revisions read as follows:


52.212-3  Offeror Representations and Certifications--Commercial Items.

* * * * *

Offeror Representations and Certifications--Commercial Items (DATE)

* * * * *
    (f) * * *
    (1)(i) The Offeror certifies that each end product, except those 
listed in paragraph (f)(2) of this provision, is a domestic end 
product.
    (ii) The Offeror shall list as foreign end products those end 
products manufactured in the United States that do not qualify as 
domestic end products.
    (iii) The terms ``domestic end product,'' ``end product,'' 
``foreign end product,'' and ``United States'' are defined in the 
clause of this solicitation entitled ``Buy American-Supplies.''
* * * * *
    (g)(1) * * *
    (i)(A) The Offeror certifies that each end product, except those 
listed in paragraph (g)(1)(ii) or (iii) of this provision, is a 
domestic end product.
    (B) The terms ``Bahrainian, Moroccan, Omani, Panamanian, or 
Peruvian end product,'' ``domestic end product,'' ``end product,'' 
``foreign end product,'' ``Free Trade Agreement country,'' ``Free Trade 
Agreement country end product,'' ``Israeli end product,'' and ``United 
States'' are defined in the clause of this solicitation entitled ``Buy 
American--Free Trade Agreements--Israeli Trade Act.''
    (ii) The Offeror certifies that the following supplies are Free 
Trade Agreement country end products (other than Bahrainian, Moroccan, 
Omani, Panamanian, or Peruvian end products) or Israeli end products as 
defined in the clause of this solicitation entitled ``Buy American--
Free Trade Agreements--Israeli Trade Act.''
* * * * *
    (iii) The Offeror shall list those supplies that are foreign end 
products (other than those listed in paragraph (g)(1)(ii) of this 
provision) as defined in the clause of this solicitation entitled ``Buy 
American--Free Trade Agreements--Israeli Trade Act.'' The Offeror shall 
list as other foreign end products those end products manufactured in 
the United States that do not qualify as domestic end products.
* * * * *
0
19. Amend section 52.212-5 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraphs (b)(48) and (b)(49)(i) through (iv) ``(MAY 
2014)'' and adding ``(DATE)'' in their places, respectively.
    The revision reads as follows:


52.212-5  Contract Terms and Conditions Required To Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders--Commercial Items (DATE)

* * * * *
0
20. Amend section 52.213-4 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (b)(1)(xvii) introductory text ``(MAY 
2014)'' and adding ``(DATE)'' in its place.
    The revision reads as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (DATE)

* * * * *
0
21. Amend section 52.225-1 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic end product''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and 
``Steel''; and
0
c. Revising paragraph (b).
    The revisions and additions read as follows:


52.225-1   Buy American--Supplies.

* * * * *

Buy American--Supplies (DATE)

    (a) * * *
    Domestic end product means--
    (1) For an end product that does not consist wholly or 
predominantly of iron or steel or a combination of both--
    (i) An unmanufactured end product mined or produced in the 
United States;
    (ii) An end product manufactured in the United States, if--
    (A) The cost of its components mined, produced, or manufactured 
in the United States exceeds 55 percent of the cost of all its 
components. Components of foreign origin of the same class or kind 
as those that the agency determines are not mined, produced, or 
manufactured in sufficient and reasonably available commercial 
quantities of a satisfactory quality are treated as domestic. 
Components of unknown origin are treated as foreign. Scrap 
generated, collected, and prepared for processing in the United 
States is considered domestic; or
    (B) The end product is a COTS item; or
    (2) For an end product that consists wholly or predominantly of 
iron or steel or a combination of both, an end product manufactured 
in the United States, if the cost of iron and steel not produced in 
the United States (excluding fasteners) as estimated in good faith 
by the contractor, constitutes less than 5 percent of the cost of 
all the components used in the end product (produced in the United 
States means that all manufacturing processes of the iron or steel 
must take place in the United States, except metallurgical processes 
involving refinement of steel additives).
* * * * *
    Fastener means a hardware device that mechanically joins or 
affixes two or more objects together. Examples of fasteners are 
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
    Steel means an alloy that includes at least 50 percent iron, 
between .02 and 2 percent carbon, and may include other elements.
* * * * *
    (b) 41 U.S.C. chapter 83, Buy American, provides a preference 
for domestic end products for supplies acquired for use in the 
United States. In accordance with 41 U.S.C. 1907, the domestic 
content test of the Buy American statute is waived for an end 
product that is a COTS item (see 12.505(a)(1)), except that for an 
end product that consists wholly or predominantly of iron or steel 
or a combination of both, the domestic content test is applied only 
to the iron and steel content of the end product, excluding 
fasteners.
* * * * *
0
22. Amend section 52.225-2 by revising the date of the provision and 
paragraph (a) to read as follows:


52.225-2   Buy American Certificate.

* * * * *

Buy American Certificate (DATE)

    (a)(1) The Offeror certifies that each end product, except those 
listed in paragraph (b) of this provision, is a domestic end 
product.
    (2) The Offeror shall list as foreign end products those end 
products manufactured in the United States that do not qualify as 
domestic end products.

[[Page 56567]]

    (3) The terms ``domestic end product,'' ``end product,'' and 
``foreign end product'' are defined in the clause of this 
solicitation entitled ``Buy American--Supplies.''
* * * * *
0
23. Amend section 52.225-3 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic end product''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and 
``Steel'';
0
c. Revising the second sentence of paragraph (c);
0
d. Revising the date in the introductory text and the second sentence 
of paragraph (c) of Alternate I;
0
e. Revising the date in the introductory text and the second sentence 
of paragraph (c) of Alternate II; and
0
f. Revising the date in the introductory text and the second sentence 
of paragraph (c) of Alternate III.
    The revisions and additions read as follows:


52.225-3  Buy American--Free Trade Agreements--Israeli Trade Act.

* * * * *

Buy American--Free Trade Agreements--Israeli Trade Act (DATE)

    (a) * * *
    Domestic end product means--
    (1) For an end product that does not consist wholly or 
predominantly of iron or steel or a combination of both--
    (i) An unmanufactured end product mined or produced in the 
United States;
    (ii) An end product manufactured in the United States, if--
    (A) The cost of its components mined, produced, or manufactured 
in the United States exceeds 55 percent of the cost of all its 
components. Components of foreign origin of the same class or kind 
as those that the agency determines are not mined, produced, or 
manufactured in sufficient and reasonably available commercial 
quantities of a satisfactory quality are treated as domestic. 
Components of unknown origin are treated as foreign. Scrap 
generated, collected, and prepared for processing in the United 
States is considered domestic; or
    (B) The end product is a COTS item; or
    (2) For an end product that consists wholly or predominantly of 
iron or steel or a combination of both, an end product manufactured 
in the United States, if the cost of iron and steel not produced in 
the United States (excluding fasteners) as estimated in good faith 
by the contractor, constitutes less than 5 percent of the cost of 
all the components used in the end product (produced in the United 
States means that all manufacturing processes of the iron or steel 
must take place in the United States, except metallurgical processes 
involving refinement of steel additives).
* * * * *
    Fastener means a hardware device that mechanically joins or 
affixes two or more objects together. Examples of fasteners are 
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
    Steel means an alloy that includes at least 50 percent iron, 
between .02 and 2 percent carbon, and may include other elements.
* * * * *
    (c) * * * In accordance with 41 U.S.C. 1907, the domestic 
content test of the Buy American statute is waived for an end 
product that is a COTS item (see 12.505(a)(1)), except that for an 
end product that consists wholly or predominantly of iron or steel 
or a combination of both, the domestic content test is applied only 
to the iron and steel content of the end product, excluding 
fasteners. * * *

Alternate I (DATE) * * *

    (c) * * * In accordance with 41 U.S.C. 1907, the domestic 
content test of the Buy American statute is waived for an end 
product that is a COTS item (see 12.505(a)(1)), except that for an 
end product that consists wholly or predominantly of iron or steel 
or a combination of both, the domestic content test is applied only 
to the iron and steel content of the end product, excluding 
fasteners. * * *

Alternate II (DATE) * * *

    (c) * * * In accordance with 41 U.S.C. 1907, the domestic 
content test of the Buy American statute is waived for an end 
product that is a COTS item (see 12.505(a)(1)), except that for an 
end product that consists wholly or predominantly of iron or steel 
or a combination of both, the domestic content test is applied only 
to the iron and steel content of the end product, excluding 
fasteners. * * *

Alternate III (DATE) * * *

    (c) * * * In accordance with 41 U.S.C. 1907, the domestic 
content test of the Buy American statute is waived for an end 
product that is a COTS item (see 12.505(a)(1)), except that for an 
end product that consists wholly or predominantly of iron or steel 
or a combination of both, the domestic content test is applied only 
to the iron and steel content of the end product, excluding 
fasteners. * * *

0
24. Amend section 52.225-4 by--
0
a. Revising the date of the provision;
0
b. Revising paragraph (a);
0
c. In paragraph (b) introductory text removing ``offeror'' and adding 
``Offeror'' in its place;
0
d. Revising the first and second sentences of paragraph (c);
0
e. In Alternate I by--
0
i. Revising the date of the Alternate; and
0
ii. Removing from paragraph (b) introductory text ``offeror'' and 
adding ``Offeror'' in its place;
0
f. In Alternate II by--
0
i. Revising the date of the Alternate; and
0
ii. Removing from paragraph (b) introductory text ``offeror'' and 
adding ``Offeror'' in its place; and
0
g. In Alternate III by--
0
i. Revising the date of the Alternate; and
0
ii. Removing from paragraph (b) introductory text ``offeror'' and 
adding ``Offeror'' in its place.
    The revisions read as follows:


52.225-4   Buy American-Free Trade Agreements-Israeli Trade Act 
Certificate.

* * * * *

Buy American-Free Trade Agreements-Israeli Trade Act Certificate (DATE)

    (a)(1) The Offeror certifies that each end product, except those 
listed in paragraph (b) or (c) of this provision, is a domestic end 
product.
    (2) The terms ``Bahrainian, Moroccan, Omani, Panamanian, or 
Peruvian end product,'' ``domestic end product,'' ``end product,'' 
``foreign end product,'' ``Free Trade Agreement country,'' ``Free 
Trade Agreement country end product,'' ``Israeli end product,'' and 
``United States'' are defined in the clause of this solicitation 
entitled ``Buy American-Free Trade Agreements-Israeli Trade Act.''
* * * * *
    (c) The Offeror shall list those supplies that are foreign end 
products (other than those listed in paragraph (b) of this 
provision) as defined in the clause of this solicitation entitled 
``Buy American--Free Trade Agreements--Israeli Trade Act.'' The 
Offeror shall list as other foreign end products those end products 
manufactured in the United States that do not qualify as domestic 
end products.
* * * * *

Alternate I (DATE) * * *

Alternate II (DATE) * * *

Alternate III (DATE) * * *

0
25. Amend section 52.225-9 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic construction material''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and 
``Steel'';
0
c. Revising paragraph (b)(1); and
0
d. Removing from paragraph (b)(3)(i) ``6 percent'' and adding ``20 
percent'' in its place.
    The revisions and additions read as follows:


52.225-9  Buy American--Construction Materials.

* * * * *

Buy American--Construction Materials (DATE)

    (a) * * *
    Domestic construction material means--
    (1) For construction material that does not consist wholly or 
predominantly of iron or steel or a combination of both--
    (i) An unmanufactured construction material mined or produced in 
the United States; or
    (ii) A construction material manufactured in the United States, 
if--

[[Page 56568]]

    (A) The cost of its components mined, produced, or manufactured 
in the United States exceeds 55 percent of the cost of all its 
components. Components of foreign origin of the same class or kind 
for which nonavailability determinations have been made are treated 
as domestic. Components of unknown origin are treated as foreign; or
    (B) The construction material is a COTS item.
    (2) For construction material that consists wholly or 
predominantly of iron or steel or a combination of both, a 
construction material manufactured in the United States if the cost 
of iron and steel not produced in the United States (excluding 
fasteners) as estimated in good faith by the contractor, constitutes 
less than 5 percent of the cost of all components used in such 
construction material (produced in the United States means that all 
manufacturing processes of the iron or steel must take place in the 
United States, except metallurgical processes involving refinement 
of steel additives).
    Fastener means a hardware device that mechanically joins or 
affixes two or more objects together. Examples of fasteners are 
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
    Steel means an alloy that includes at least 50 percent iron, 
between .02 and 2 percent carbon, and may include other elements.
* * * * *
    (b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy 
American, by providing a preference for domestic construction 
material. In accordance with 41 U.S.C. 1907, the domestic content 
test of the Buy American statute is waived for construction material 
that is a COTS item, except that for construction material that 
consists wholly or predominantly of iron or steel or a combination 
of both, the domestic content test is applied only to the iron and 
steel content of the construction materials, excluding fasteners. 
(See FAR 12.505(a)(2)). The Contractor shall use only domestic 
construction material in performing this contract, except as 
provided in paragraphs (b)(2) and (b)(3) of this clause.
* * * * *
0
26. Amend section 52.225-11 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic construction material''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and 
``Steel'';
0
c. Revising paragraph (b)(1);
0
d. Removing from paragraph (b)(4)(i) ``6 percent'' and adding ``20 
percent'' in its place; and
0
e. In Alternate I--
0
i. Revising the date of the Alternate; and
0
ii. Revising paragraph (b)(1).
    The revisions and additions read as follows:


52.225-11   Buy American--Construction Materials Under Trade 
Agreements.

* * * * *

Buy American--Construction Materials Under Trade Agreements (DATE)

    (a) * * *
    Domestic construction material means--
    (1) For construction material that does not consist wholly or 
predominantly of iron or steel or a combination of both--
    (i) An unmanufactured construction material mined or produced in 
the United States; or
    (ii) A construction material manufactured in the United States, 
if--
    (A) The cost of its components mined, produced, or manufactured 
in the United States exceeds 55 percent of the cost of all its 
components. Components of foreign origin of the same class or kind 
for which nonavailability determinations have been made are treated 
as domestic. Components of unknown origin are treated as foreign; or
    (B) The construction material is a COTS item;
    (2) For construction material that consists wholly or 
predominantly of iron or steel or a combination of both, a 
construction material manufactured in the United States if the cost 
of iron and steel not produced in the United States (excluding 
fasteners) as estimated in good faith by the contractor, constitutes 
less than 5 percent of the cost of all components used in such 
construction material (produced in the United States means that all 
manufacturing processes of the iron or steel must take place in the 
United States, except metallurgical processes involving refinement 
of steel additives).
    Fastener means a hardware device that mechanically joins or 
affixes two or more objects together. Examples of fasteners are 
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
    Steel means an alloy that includes at least 50 percent iron, 
between .02 and 2 percent carbon, and may include other elements.
* * * * *
    (b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy 
American, by providing a preference for domestic construction 
material. In accordance with 41 U.S.C. 1907, the domestic content 
test of the Buy American statute is waived for construction material 
that is a COTS item, except that for construction material that 
consists wholly or predominantly of iron or steel or a combination 
of both, the domestic content test is applied only to the iron and 
steel content of the construction material, excluding fasteners. 
(See FAR 12.505(a)(2)). In addition, the Contracting Officer has 
determined that the WTO GPA and Free Trade Agreements (FTAs) apply 
to this acquisition. Therefore, the Buy American restrictions are 
waived for designated country construction materials.
* * * * *

Alternate I (DATE) * * *

    (b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy 
American, by providing a preference for domestic construction 
material. In accordance with 41 U.S.C. 1907, the domestic content 
test of the Buy American statute is waived for construction material 
that is a COTS item, except that for construction material that 
consists wholly or predominantly of iron or steel or a combination 
of both, the domestic content test is applied only to the iron and 
steel content of the construction material, excluding fasteners. 
(See FAR 12.505(a)(2)). In addition, the Contracting Officer has 
determined that the WTO GPA and all the Free Trade Agreements except 
the Bahrain FTA, NAFTA, and the Oman FTA apply to this acquisition. 
Therefore, the Buy American statute restrictions are waived for 
designated country construction materials other than Bahrainian, 
Mexican, or Omani construction materials.
* * * * *
0
27. Amend section 52.225-21 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (b)(4)(i)(B) ``6 percent'' and adding ``20 
percent'' in its place;
0
c. Removing from paragraph (c) heading ``Section'' and adding 
``section'' in its place; and
0
d. In paragraph (d):
0
i. Removing from the first undesignated paragraph following the table 
``reponse'' and adding ``response'' in its place; and
0
ii. Removing from the second undesignated paragraph following the table 
``*Include'' and adding ``[*Include'' in its place.
    The revision reads as follows:


52.225-21   Required Use of American Iron, Steel, and Manufactured 
Goods--Buy American Statute--Construction Materials.

* * * * *

Required Use of American Iron, Steel, and Manufactured Goods--Buy 
American Statute--Construction Materials (DATE)

* * * * *
0
28. Amend section 52.225-22 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (b) ``offeror'' and adding ``Offeror'' in 
its place wherever it appears;
0
c. Removing from paragraph (c)(1)(ii) ``6 percent'' and adding ``20 
percent'' in its place;
0
d. Removing from paragraph (c)(3) ``offeror'' and adding ``Offeror'' in 
its place; and
0
e. Removing from paragraphs (d)(1), (2), and (3) introductory text 
``offeror'' and adding ``Offeror'' in their places, respectively.
    The revision reads as follows:


52.225-22   Notice of Required Use of American Iron, Steel, and 
Manufactured Goods--Buy American Statute--Construction Materials.

* * * * *

[[Page 56569]]

Notice of Required Use of American Iron, Steel, and Manufactured 
Goods--Buy American Statute--Construction Materials (DATE)

* * * * *
0
29. Amend section 52.225-23 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (b)(4)(i)(B) ``6 percent'' and adding ``20 
percent'' in its place.
    The revision reads as follows:


52.225-23   Required Use of American Iron, Steel, and Manufactured 
Goods--Buy American Statute--Construction Materials Under Trade 
Agreements.

* * * * *

Required Use of American Iron, Steel, and Manufactured Goods--Buy 
American Statute--Construction Materials Under Trade Agreements (DATE)

* * * * *
0
30. Amend section 52.225-24 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (b) ``offeror'' and adding ``Offeror'' in 
its place wherever it appears;
0
c. Removing from paragraph (c)(1)(ii) ``6 percent'' and adding ``20 
percent'' in its place;
0
d. Removing from paragraph (c)(3) ``offeror'' and adding ``Offeror'' in 
its place; and
0
e. Removing from paragraphs (d)(1), (2), and (3) introductory text 
``offeror'' and adding ``Offeror'' in their places, respectively.
    The revision reads as follows:


52.225-24   Notice of Required Use of American Iron, Steel, and 
Manufactured Goods--Buy American Statute--Construction Materials Under 
Trade Agreements.

* * * * *

Notice of Required Use of American Iron, Steel, and Manufactured 
Goods--Buy American Statute--Construction Materials Under Trade 
Agreements (DATE)

* * * * *
[FR Doc. 2020-20116 Filed 9-11-20; 8:45 am]
BILLING CODE 6820-EP-P

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