Defense Federal Acquisition Regulation Supplement: DFARS Buy American Act Requirements (DFARS Case 2022-D019), 11950-11993 [2024-01220]

Agencies

• Defense Acquisition Regulations System
• DEPARTMENT OF DEFENSE

[Federal Register Volume 89, Number 32 (Thursday, February 15, 2024)]
[Rules and Regulations]
[Pages 11950-11993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01220]



[[Page 11949]]

Vol. 89

Thursday,

No. 32

February 15, 2024

Part II





 Department of Defense





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Defense Acquisition Regulations System





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48 CFR Parts 213, 225, and 252





Defense Federal Acquisition Regulation Supplement: DFARS Buy American 
Act Requirements (DFARS Case 2022-D019); Final Rule

Federal Register / Vol. 89 , No. 32 / Thursday, February 15, 2024 / 
Rules and Regulations

[[Page 11950]]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 213, 225, and 252

[Docket DARS-2023-0024]
RIN 0750-AL74


Defense Federal Acquisition Regulation Supplement: DFARS Buy 
American Act Requirements (DFARS Case 2022-D019)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement an Executive 
order addressing domestic preferences in DoD procurement.

DATES: Effective February 15, 2024.

FOR FURTHER INFORMATION CONTACT: Kimberly Bass, telephone 703-717-3446.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published a proposed rule in the Federal Register at 88 FR 
37942 on June 9, 2023, to amend the DFARS to supplement the Federal 
Acquisition Regulation (FAR) implementation of Executive Order (E.O.) 
14005, Ensuring the Future Is Made in All of America by All of 
America's Workers (86 FR 7475, January 28, 2021). E.O. 14005 
contemplates a series of actions to enable the United States Government 
to maximize the use of goods, products, and materials produced in the 
United States in order to strengthen and diversify domestic supplier 
bases and create new opportunities for U.S. firms and workers. The rule 
addresses section 8 of the E.O., which requires increasing the impact 
of the Buy American statute.
    The revisions to the DFARS in this final rule supplement the FAR 
final rule published in the Federal Register at 87 FR 12780 on March 7, 
2022, with the required conforming changes for the DoD-unique 
requirements. Four respondents submitted public comments in response to 
the proposed rule.

II. Discussion and Analysis

    DoD reviewed the public comments in the development of the final 
rule. A discussion of the comments is provided. There were no changes 
made to the proposed rule as a result of those comments.

A. Summary of Significant Changes From the Proposed Rule

    The prescriptions for use of the solicitation provisions at DFARS 
252.225-7000, Buy America--Balance of Payments Program Certificate, and 
DFARS 252.225-7035, Buy American--Free Trade Agreements--Balance of 
Payments Program Certificate, were revised to clarity the use of the 
solicitation provisions when the solicitation includes the provision at 
FAR 52.204-7, System for Award Management. The statement in the 
prescriptions at DFARS 225.1101(1) and 225.1101(9), ``If the 
solicitation includes the provision at FAR 52.204-7, do not separately 
list the provision 252.225-7000 in the solicitation'', was removed.
    The revision allows for the required identification by the offeror 
of supplies that do not meet the definition of a domestic end product 
and an increased domestic content threshold, by separately listing 
qualifying country and other foreign end products in its offer. The 
offeror's certification provides the country of origin for those 
foreign end products that do exceed 55 percent domestic content, except 
for those that are commercially available off-the-shelf (COTS) items. 
Moreover, the provisions at DFARS 252.225-7000 and 252.225-7035 include 
the DoD-unique requirements associated with the framework in the DFARS 
as implemented in the FAR for the future application of the enhanced 
price preference for a domestic product that is considered a critical 
item.

B. Analysis of Public Comments

1. Support for the Rule
    Comment: Some respondents were supportive of the overall goal of 
the rule in general to strengthen the domestic industrial base and 
promote American manufacturing and innovation.
    Response: DoD acknowledges the respondents' support for the rule.
2. Definitions
    Comment: A few respondents requested that a definition of domestic 
content be provided. A respondent requested clarity on how the 
definition of domestic content differs from domestic end product, 
domestic component, or domestic source.
    Response: The rule revises the definitions of domestic end product, 
domestic construction material, and qualifying country end product, and 
makes conforming revisions in the applicable DFARS solicitation 
provisions and contract clauses including alternates to implement the 
newly established schedule for domestic content threshold that a 
product must meet to be defined as ``domestic''. The current definition 
of domestic end product is at DFARS 225.003. ``Domestic component'' and 
``domestic source'' are not defined in this rule. However, DFARS 
225.003 states, ``Source, when restricted by words such as foreign, 
domestic, or qualifying country, means the actual manufacturer or 
producer of the end product or component.'' Moreover, the Buy American 
statute, for purchases above the micro-purchase threshold, still 
requires that only domestic end products be acquired subject to the 
listed exceptions in accordance with the requirements at DFARS 225.101 
to determine whether a manufactured end product is a domestic end 
product.
3. Framework for Enhanced Price Preference
    Comment: A respondent conveyed thoughts regarding the need to 
ensure compliance with the domestic content framework to reduce DoD 
supply vulnerabilities and ensure contractor compliance with the 
domestic content requirements for critical items, components, and the 
price preferences. Another respondent further expressed the need for 
guidance on how domestic content of critical components will be 
accounted for and evaluated in source selection. A respondent also 
requested a clear definition of critical component, with explanation of 
how it differs from other similar terms. A respondent also requested 
that a definition of critical component in coordination with industry 
partners be provided.
    Response: The rule includes the future application of an enhanced 
price preference for a domestic product that is considered a critical 
item or is made up of critical components. The revisions to the DFARS 
in this rule only supplement the FAR by making the necessary conforming 
changes to specifically incorporate the DoD-unique requirements.
    The proposed policy guidance on how the domestic content of 
critical items will be accounted for and evaluated will be provided in 
a subsequent rulemaking under FAR Case 2022-004, Enhanced Price 
Preference for Critical Items. The definition of critical component is 
provided at FAR 25.003, which was established as part of the framework 
for the enhanced price preference to be implemented in the subsequent 
FAR rule for critical items.
4. Buy American Act Exceptions and Waivers
    Comment: A respondent relayed concerns with the use of a public

[[Page 11951]]

interest exception and continued use of Reciprocal Defense Procurement 
(RDP) Agreements with qualifying countries for the Buy American Act 
requirements implemented in the rule. A respondent commented that the 
rule creates more bureaucracy for senior Government officials, and that 
bureaucracy should not extend to decisions about individual contract 
terms and conditions. A respondent stated the rule should balance 
benefits of domestic sourcing with potential risks and provide 
reasonable exemptions or waivers for when domestic sourcing is not 
feasible. A respondent recommended the rule should address potential 
impacts on increased domestic content on availability, quality, and 
affordability of end products and components essential for national 
security or public interest. Additionally, a respondent stated that 
consideration should be given to tradeoffs between domestic sourcing 
and other factors. The respondent further recommended clear, consistent 
procedures for granting waivers and exceptions to the Buy American Act, 
and to define roles and responsibilities of stakeholders involved in 
the waiver process to streamline and standardize the process.
    Response: The public interest exception to the Buy American statute 
and the use of RDP Agreements with qualifying countries in DoD are 
essential to ensure mutual military readiness, standardization, and 
interoperability of equipment between the armed forces of the 
associated allied nations and for national security interests.
    DFARS 225.101(d)(1) provides for a senior procurement executive to 
allow the application of an alternate domestic content test in defining 
``domestic end product'' after consultation with the Office of 
Management and Budget's Made in America Office, a process internal to 
the Government. The alternate domestic content test will allow the 
contractor to comply with the domestic content threshold that applies 
at the time of contract award, for the entire period of performance for 
that contract.
    Additionally, the nonavailability waiver determination requirements 
of the OMB memorandum titled ``Improving the Transparency of Made in 
America Waivers,'' dated October 26, 2021, and the associated OMB 
Memorandum M-21-26, Increasing Opportunities for Domestic Sourcing and 
Reducing the Need for Waivers from Made in America Laws, dated June 11, 
2021, provide for more transparency in the Federal marketplace to 
support domestic sourcing and increase public trust in the Federal 
Government's commitment to an expanded U.S. domestic supplier base. 
Moreover, OMB Memorandum M-21-26 outlines the initial process 
management steps to help Federal agencies prepare for and support a 
centralized strategic nonavailability waiver determination review 
process as required by E.O. 14005.
5. Alternate Domestic Content Test
    Comment: A few respondents stated concerns with the domestic 
content threshold requirements to be determined in the year of 
delivery. A respondent recommended the rule should be clear and 
concise, and the content requirements should be set at the time of 
contract award for the life of the contract. A respondent recommended a 
reasonable time for transition to comply with the new content 
requirements and provide technical support. A respondent also stated 
that changing content thresholds over time will be a complicating 
factor for multi-year indefinite-delivery, indefinite-quantity 
contracts, and the year of delivery requirements for domestic content 
creates uncertainty.
    Response: The rule allows for industry transition and the use of 
the 55 percent domestic content threshold (i.e., the fallback threshold 
as included in the FAR final rule), until one year after the increase 
of the domestic content threshold to 75 percent. This rule supplements 
the FAR with a consistent 55 percent fallback threshold available until 
January 1, 2030, for use if domestic products at a higher threshold are 
not available, or the cost to acquire them would be unreasonable.
    This rule revises the definition of ``domestic end product'' to 
authorize the use of the fallback threshold if the award is made before 
January 1, 2030, for a foreign end product that exceeds 55 percent 
domestic content (see DFARS 225.103(b)(ii)). Therefore, a 
nonavailability determination is not required before January 1, 2030, 
if there is an offer for a foreign end product that exceeds 55 percent 
domestic content, including qualifying country content (see DFARS 
225.103(b)(ii) and 225.202(a)(2)).
    There are some instances where it is not feasible for some 
indefinite-delivery, indefinite-quantity contracts that are subject to 
the Buy American statute to meet changing domestic content thresholds 
throughout the period of performance. The rule at DFARS 225.101(d)(1) 
includes a process whereby an agency senior procurement executive may 
allow for application of an alternate domestic content test to the 
definition of ``domestic construction material'' and ``domestic end 
product'' and require the contractor to comply only with the domestic 
content threshold that is in effect at contract award for the entire 
contract term.
6. Supply Chain Impacts
    Comment: A respondent stated the rule will create supply chain 
challenges and recommended a more efficient rule. A respondent also 
stated that solutions were set with supply chains identified on award 
and the rule creates uncertainties in supply and can impact DoD 
readiness.
    Response: The rule supplements the FAR final rule, which implements 
section 8 of E.O. 14005, aimed to strengthen the impact of Federal 
procurement preferences in the Buy American statute for end products 
and construction materials that are domestically manufactured from 
substantially all domestic content. The changes to the implementation 
of the Buy American statute were designed to support greater domestic 
production of products critical to our national and economic security. 
The rule provides a schedule for future increases to domestic content 
requirements, and a fallback threshold that would allow for products 
meeting a specific lower domestic content threshold to qualify as 
domestic products under certain circumstances. The rule supplements the 
FAR with a consistent 55 percent fallback threshold available until 
January 1, 2030, for use where domestic end products at a higher 
threshold are not available or the cost to acquire them would be 
unreasonable.
7. Determining Reasonableness of Cost
    Comment: A respondent recommended the rule provide more clarity and 
guidance on how to determine domestic content of end products and 
components, especially items with multiple sources or origins. The 
respondent also recommended the rule should provide how to calculate 
the cost of components, and provide what evidence is required to 
support the claims to reduce errors and costs. The respondent further 
stated that a significant factor in implementation of the rule should 
be transactional simplicity to reduce burden on all parties.
    Response: There were no changes made to the process for determining 
cost reasonableness in the rule. Also see the response in this section 
at comment category number 2. Definitions.
8. Outside the Scope of the Rule
    Comment: A respondent specified the need for the prompt publication 
of FAR

[[Page 11952]]

Case 2022-004, Enhanced Price Preference for Critical Components and 
Critical Items, on about August 23, 2023.
    Response: FAR case 2022-004, Enhanced Price Preference for Critical 
Items, is intended to establish the definitive list of critical items 
and critical components in the FAR, along with their associated 
enhanced price preference(s). The publication date for the FAR rule 
referenced is out of the scope of the implementation of this DFARS 
rule. However, information on FAR case 2022-004, Enhanced Price 
Preference for Critical Items, is provided at https://www.reginfo.gov/public/do/eAgendaMain. For information on FAR rules, select ``DoD/GSA/
NASA (FAR)'' from the ``Select Agency'' drop-down menu.

C. Other Changes

    At DFARS 213.302-5(d)(i) and (ii) the titles of the clauses at 
DFARS 252.225-7001 and 252.225-7036 are corrected to remove the word 
``Act''. Conforming revisions required to the definition of qualifying 
country end product are made to the Basic and Alternates of the clause 
at DFARS 252.225-7021, Trade Agreements.

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

    This final rule includes amendments to the following solicitation 
provisions and contract clauses: DFARS 252.225-7000, Buy American and 
Balance of Payments Program Certificate (Basic and Alternate I); DFARS 
252.225-7001, Buy American and Balance of Payments Program (Basic and 
Alternate I); DFARS 252.225-7021 Trade Agreements (Basic and Alternates 
II, III, and IV); DFARS 252.225-7035, Buy American--Free Trade 
Agreements--Balance of Payments Program Certificate (Basic and 
Alternates I, II, III, IV, and V); DFARS 252.225-7036, Buy American--
Free Trade Agreements--Balance of Payments Program (Basic and 
Alternates I, II, III, IV, and V); DFARS 252.225-7044, Balance of 
Payments Program--Construction Material, (Basic and Alternate I); and 
252.225-7045, Balance of Payments Program--Construction Material Under 
Trade Agreements (Basic and Alternates I, II, and III). In addition, 
the rule includes new alternates for the clauses at DFARS 252.225-7001, 
252.225-7036, 252.225-7044, and 252.225-7045. The rule does not add any 
new requirements on contracts at or below the simplified acquisition 
threshold, for commercial products including commercially available off 
the-shelf items, or for commercial services.

IV. Expected Impact of the Rule

    This final rule revises the DFARS to supplement the FAR's 
implementation of the Buy American statute in accordance with E.O. 
14005, via the final FAR rule (FAR Case 2021-008, published March 7, 
2022, in the Federal Register at 87 FR 12780, with an effective date of 
October 25, 2022). The FAR final rule provided for the following:
    1. An increase to the domestic content threshold that a product 
must meet to be defined as ``domestic''; a schedule for future 
increases; and a fallback threshold that would allow products meeting a 
specific lower domestic content threshold to qualify as a domestic 
product under certain circumstances; and
    2. A framework for the application of an enhanced price preference 
for a domestic product that is considered a critical product or is made 
up of critical components.
    This final rule implements these changes in DFARS part 225 and in 
the solicitation provisions and contract clauses that contain DoD-
unique requirements such as the inclusion of qualifying countries. A 
qualifying country is a country that has a reciprocal defense 
procurement memorandum of understanding or international agreement with 
the United States in which both countries agree to remove barriers to 
purchases of supplies produced in the other country or services 
performed by sources of the other country. The memorandum of 
understanding or agreement complies, where applicable, with the 
requirements of section 36 of the Arms Export Control Act (22 U.S.C. 
2776) and with 10 U.S.C. 2457. The DFARS definition of ``domestic end 
product'', for the purpose of compliance with the domestic content 
threshold, includes components that are mined, produced, or 
manufactured in the United States and in qualifying countries. The list 
of qualifying countries appears in the definition of ``qualifying 
country'' at DFARS 225.003 and in certain contract clauses.
    It is anticipated that those domestic industries adjusting for the 
increased domestic content within their supply chains to continue 
supplying domestic end products are more likely to benefit from a 
competitive advantage when the rule takes effect. Because the FAR final 
rule has been in effect since October 2022, potential offerors may 
already be making those adjustments.
    The Buy American statute and the Balance of Payments Program (e.g., 
certifications required of offerors to demonstrate end products are 
domestic) remain unchanged and continue to reflect processes that have 
been in place for decades. Under this final rule, as under the FAR 
final rule, when deciding whether to pursue a procurement and use of 
products (i.e., domestic or foreign), offerors will have to plan for 
the future changes to the domestic content threshold during the period 
of performance of an anticipated contract, unless use of an alternate 
domestic content threshold, in effect at time of contract award, has 
been authorized.
    As under the FAR final rule, those offerors that do not modify 
their supply chains to comply with the scheduled increases to the 
domestic content threshold will still be able to propose an offer for 
DoD contracts. However, the price preference may no longer be available 
to them.
    Increased domestic sourcing of content facilitates the reduction of 
DoD's supply chain risk. Because the FAR final rule has been in effect 
since October 2022, any increased burden with regard to the timed 
increases to the domestic content threshold, on contractors in 
particular, could be minor if not de minimis.
    The framework for the enhanced price preference is intended to 
provide a stable source of demand for domestically produced critical 
products. This final rule merely supplements the FAR with the DoD-
unique requirements. A separate rulemaking will be undertaken to add to 
the FAR critical products and components to establish the associated 
preferences. Therefore, the associated cost impacts and benefits will 
be captured in the subsequent FAR rulemaking (FAR case 2022-004, 
Enhanced Price Preference for Critical Items).
    There is an information collection burden associated with offerors 
identifying when a domestic end product or domestic construction 
material contains a critical component or critical item (see section 
VIII of this preamble), but it is anticipated that the information 
collection will be fully implemented for all agencies that use the FAR 
in the future rulemaking for FAR Case 2022-004. Any of the associated 
burden should be offset by the benefits of the larger price preference 
received for these items. The overall cost impact of this rule is not 
significant, and any associated impact is anticipated to be primarily 
positive.

[[Page 11953]]

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, as amended.

VI. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD will submit a copy of 
the interim or final rule with the form, Submission of Federal Rules 
under the Congressional Review Act, to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States. A 
major rule under the Congressional Review Act cannot take effect until 
60 days after it is published in the Federal Register. The Office of 
Information and Regulatory Affairs has determined that this rule is not 
a major rule as defined by 5 U.S.C. 804.

VII. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
and is summarized as follows:
    This rule includes amendments to the Defense Federal Acquisition 
Regulation Supplement (DFARS) to supplement the Federal Acquisition 
Regulation (FAR) implementation of Executive Order (E.O.) 14005, 
Ensuring the Future Is Made in All of America by All of America's 
Workers (86 FR 7475, January 28, 2021), by addressing DoD-unique 
requirements. The FAR final rule, published at 87 FR 12780 on March 7, 
2022 (effective October 25, 2022), implemented section 8 of E.O. 14005, 
which requires the impact of the Buy American statute to be 
strengthened by providing--
     An increase to the domestic content threshold required to 
be met for an end product and construction material to be defined as 
``domestic'' and a schedule for future increases;
     A fallback threshold that allows for end products meeting 
a specific lower domestic content threshold to qualify as a domestic 
end product under certain circumstances; and
     A framework for application of an enhanced price 
preference for a domestic end product that is considered a critical 
item or is made up of critical components.
    The objective of the rule is to make conforming changes associated 
with the FAR implementation of E.O. 14005 that incorporate the DoD-
unique requirements (e.g., inclusion of qualifying countries). E.O. 
14005 addresses a series of actions to enable the U.S. Government to 
maximize the use of goods, products, and materials produced in the 
United States in order to strengthen and diversify domestic supplier 
bases and create new opportunities for U.S. firms and workers.
    No public comments were received in response to the initial 
regulatory flexibility analysis.
    Data was obtained from the Federal Procurement Data System for 
fiscal years 2019, 2020, and 2021 on awards valued over the micro-
purchase threshold for construction and for supplies. Based on the 
data, DoD made an average of 161,686 awards for supplies per year to 
approximately 14,913 small entities and an average of 177 awards for 
construction per year to approximately 167 small entities. This rule 
could apply to those small entities.
    The rule includes new reporting, recordkeeping, or other compliance 
requirements for small businesses. Prior to this rule, small businesses 
already had to monitor compliance with contract requirements pertaining 
to the increased domestic content threshold implemented in the FAR for 
contracted items. This final rule makes conforming changes to align the 
DFARS with the FAR while incorporating the DoD-unique requirements. Due 
to small businesses' familiarity with the FAR final rule, the increases 
in the domestic content threshold implemented in this rule are unlikely 
to result in additional disruption to existing contractor supply 
chains.
    The rule contains a few additional reporting requirements for 
certain offerors, including small businesses. Small businesses who 
submit an offer for a solicitation subject to the Buy American statute 
or the Balance of Payments Program already must list the foreign end 
products included in their offer. This final rule requires that the 
offeror also identify which of these foreign end products are not 
commercially available off-the-shelf items, do not consist wholly or 
predominantly of iron or steel or a combination of both, and meet or 
exceed the fallback domestic content threshold.
    There are no known significant alternative approaches to the rule 
that would meet the requirements of the Executive order.

VII. Paperwork Reduction Act

    This final rule affects the information collection requirements in 
the provision at DFARS 252.225-7000, Buy American--Balance of Payments 
Program Certificate, currently approved under Office of Management and 
Budget Control Number 0704-0229, entitled Defense Federal Acquisition 
Regulation Supplement (DFARS) Defense Federal Acquisition Regulation 
Supplement Part 225, Foreign Acquisition, and Related Clauses at 
252.225; DD Form 2139, in accordance with the Paperwork Reduction Act 
(44 U.S.C. chapter 35). The impact, however, is negligible, because the 
provision already requires the offeror to identify in its proposal 
supplies that do not meet the definition of domestic end product, 
separately listing qualifying country and other foreign end products. 
The Buy American statute does not apply to acquisitions of commercial 
information technology, and therefore this provision would not apply to 
commercial products and commercial services.

List of Subjects in 48 CFR Parts 213, 225, and 252

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 213, 225, and 252 are amended as follows:

0
1. The authority citation for parts 213, 225, and 252 continues to read 
as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 213--SIMPLIFIED ACQUSITION PROCEDURES

0
2. Amend section 213.302-5 by revising paragraph (d) to read as 
follows:


213.302-5  Clauses.

* * * * *
    (d) When using the clause at FAR 52.213-4, delete the reference to 
the clause at FAR 52.225-1, Buy American--Supplies. Instead, if the Buy 
American statute applies to the acquisition, use the clause at--
    (i) 252.225-7001, Buy American and Balance of Payments Program, or 
the appropriate alternate, as prescribed at 225.1101(2); or
    (ii) 252.225-7036, Buy American--Free Trade Agreements--Balance of

[[Page 11954]]

Payments Program, or the appropriate alternate, as prescribed at 
225.1101(10).

PART 225--FOREIGN ACQUISITION

0
3. Amend section 225.003--
0
a. In the definition of ``Domestic end product'' by revising the first 
sentence of paragraph (1)(ii)(A) introductory text; and
0
b. In the definition of ``Qualifying country end product'' by revising 
paragraph (2)(i) introductory text and paragraph (2)(ii).
    The revisions read as follows:


225.003  Definitions.

* * * * *
    Domestic end product means--
    (1) * * *
    (ii) * * *
    (A) The cost of its qualifying country components and its 
components that are mined, produced, or manufactured in the United 
States exceeds 60 percent of the cost of all its components, except 
that the percentage will be 65 percent for items delivered in calendar 
years 2024 through 2028 and 75 percent for items delivered starting in 
calendar year 2029, unless an alternate percentage is established for a 
contract in accordance with FAR 25.101(d); or award is made before 
January 1, 2030, for a foreign end product that exceeds 55 percent 
domestic content (see 225.103(b)(ii)). * * *
* * * * *
    Qualifying country end product means--
* * * * *
    (2) * * *
    (i) The cost of the following types of components exceeds 60 
percent of the cost of all its components, except that the percentage 
will be 65 percent for items delivered in calendar years 2024 through 
2028 and 75 percent for items delivered starting in calendar year 2029, 
unless an alternate percentage is established for a contract:
* * * * *
    (ii) The end product is a COTS item.
* * * * *

0
4. Amend section 225.101 by--
0
a. Revising paragraph (a)(ii)(A); and
0
b. Adding paragraph (d).
    The revision and addition read as follows:


225.101  General.

    (a) * * *
    (ii)(A) Except for an end product that consists wholly or 
predominantly of iron or steel or a combination of both, the cost of 
its U.S. and qualifying country components exceeds 60 percent of the 
cost of all its components, except that the percentage will be 65 
percent for items delivered in calendar years 2024 through 2028 and 75 
percent for items delivered starting in calendar year 2029, but see 
paragraph (d) of this section. This test is applied to end products 
only and not to individual components.
* * * * *
    (d)(1) In lieu of the threshold increases in FAR 25.101(a)(2)(i), 
use the domestic content threshold increases in paragraph (a)(ii) of 
this section. The senior procurement executive may approve application 
of an alternate domestic content test, under which the domestic content 
threshold in effect at the time of contract award will apply to the 
entire period of performance of the contract, following consultation 
with the Office of Management and Budget's Made in America Office. See 
PGI 225.101 for guidance on documentation requirements when the senior 
procurement executive approves application of an alternate domestic 
content test.
    (2) When the senior procurement executive allows for application of 
an alternate domestic content test for the contract pursuant to FAR 
25.101(d)(1) (but see paragraph (d)(1) of this section)--
    (A) See 225.1101(2)(iv) for use of alternate II of the clause at 
252.225-7001, Buy American and Balance of Payments Program;
    (B) See 225.1101(2)(v) for use of alternate III of the clause at 
252.225-7001, Buy American and Balance of Payments Program;
    (C) See 225.1101(9) for use of the basic or alternate provision at 
252.225-7035, Buy American--Free Trade Agreements--Balance of Payments 
Program Certificate, or the basic or alternate clause at 252.225-7036, 
Buy American--Free Trade Agreements--Balance of Payments Program; and
    (D) See 225.1101(10)(i) for use of the basic or alternate clause at 
252.225-7036, Buy American--Free Trade Agreements--Balance of Payments 
Program.

0
5. Amend section 225.103--
0
a. By revising paragraph (b)(ii) introductory text; and
0
b. In paragraph (c) by removing ``Subpart'' and adding ``subpart'' in 
its place.
    The revision reads as follows:


225.103  Exceptions.

* * * * *
    (b) * * *
    (ii) A determination is not required before January 1, 2030, if 
there is an offer for a foreign end product that exceeds 55 percent 
domestic content. Except as provided in FAR 25.103(b)(3), the 
determination shall be approved--
* * * * *

0
6. Redesignate section 225.105 as section 225.106 and revise newly 
redesignated section 225.106 to read as follows:


225.106  Determining reasonableness of cost.

    (b) Use an evaluation factor of 50 percent instead of the factors 
specified in FAR 25.106(b)(1)(i) and (c)(1)(i).


225.170  [Amended]

0
7. Amend section 225.170 by removing ``Subpart'' and adding ``subpart'' 
in its place.

0
8. Revise section 225.202 to read as follows:


225.202  Exceptions.

    (a)(2) A nonavailability determination is not required for 
construction materials listed in FAR 25.104(a). For other materials, a 
nonavailability determination shall be approved at the levels specified 
in 225.103(b)(ii). Use the estimated value of the construction 
materials to determine the approval level. A nonavailability 
determination is not required before January 1, 2030, if there is an 
offer for foreign construction material that exceeds 55 percent 
domestic content (also see FAR 25.204(b)(1)(ii) and (b)(2)(ii)).

0
9. Amend section 225.502--
0
a. In paragraph (c)(i)(A) by removing ``subject only to the Buy 
American or Balance of Payments Program'' and adding ``subject only to 
the Buy American statute or the Balance of Payments Program'' in its 
place;
0
b. In paragraph (c)(i)(B) by removing ``factor'' and adding ``factor, 
but see 225.106'' in its place; and
0
c. By revising paragraph (c)(ii)(C).
    The revision reads as follows:


225.502  Application.

* * * * *
    (c) * * *
    (ii) * * *
    (C) If the low offer is a foreign offer that is exempt from 
application of the Buy American or Balance of Payments Program 
evaluation factor, award on that offer. If the low offer is a 
qualifying country offer from a country listed at 225.872-1(b), execute 
a determination in accordance with 225.872-4. A qualifying country 
offer is subject to the domestic content requirement for end products 
that are wholly or predominantly of iron or steel or a combination of 
both.
* * * * *

[[Page 11955]]


0
10. Amend section 225.1101--
0
a. In paragraph (1) introductory text removing the last sentence in the 
text;
0
b. In paragraph (1)(i) by removing ``basic clause'' and adding ``basic 
clause or alternate II of the clause'' in its place;
0
c. In paragraph (1)(ii) by removing ``alternate I of the clause'' and 
adding ``alternate I or alternate III of the clause'' in its place;
0
d. In paragraph (2)(i) by--
0
i. Removing ``basic or the alternate'' and adding ``basic or an 
alternate'' in its place; and
0
ii. Removing ``Act'';
0
e. By adding paragraphs (2)(iv) and (v);
0
f. By redesignating paragraphs (6)(iii) and (iv) as (6)(v) and (vi), 
respectively; and adding new paragraphs (6)(iii) and (iv);
0
g. In paragraph (9) introductory text, removing the last sentence;
0
h. In paragraph (9)(i) by removing ``basic of the clause'' and adding 
``basic or alternate VI of the clause'' in its place;
0
i. In paragraph (9)(ii) by removing ``alternate I of the clause'' and 
adding ``alternate I or alternate VII of the clause'' in its place;
0
j. In paragraph (9)(iii) by removing ``alternate II of the clause'' and 
adding ``alternate II or alternate VIII of the clause'' in its place;
0
k. In paragraph (9)(iv) by removing ``alternate III of the clause'' and 
adding ``alternate III or alternate IX of the clause'' in its place;
0
l. In paragraph (9)(v) by removing ``alternate IV of the clause'' and 
adding ``alternate IV or alternate X of the clause'' in its place;
0
m. In paragraph (9)(vi) by removing ``alternate V of the clause'' and 
adding ``alternate V or alternate XI of the clause'' in its place; and
0
n. In paragraph (10)(i) by adding paragraphs (G) through (L).
    The additions read as follows:


225.1101  Acquisition of supplies.

* * * * *
    (2) * * *
    (iv) Use alternate II of the clause in lieu of the basic clause in 
solicitations and contracts if--
    (A) The acquisition is not of end products listed in 225.401-70 in 
support of operations in Afghanistan; and
    (B) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (v) Use alternate III of the clause in lieu of Alternate I of the 
clause in solicitations and contracts if--
    (A) The acquisition is of end products listed in 225.401-70 in 
support of operations in Afghanistan; and
    (B) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
* * * * *
    (6) * * *
    (iii) Use the alternate III clause in lieu of the basic clause in 
solicitations and contracts that are not of end products in support of 
operations in Afghanistan or that include the clause at 252.225-7024, 
Requirement for Products or Services from Afghanistan, when an 
alternate domestic content threshold will apply to the entire period of 
performance as approved by the senior procurement executive (see 
225.101(d)).
    (iv) Use the alternate IV clause in lieu of the alternate II clause 
in solicitations and contracts that do not include the clause at 
252.225-7024, Requirement for Products or Services from Afghanistan, 
when--
    (A) The acquisition is of end products in support of operations in 
Afghanistan; and
    (B) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
* * * * *
    (10) * * *
    (i) * * *
    (G) Use the alternate VI clause in lieu of the basic clause in 
solicitations and contracts, except if the acquisition is of end 
products in support of operations in Afghanistan, when--
    (1) The estimated value equals or exceeds $100,000 but is less than 
$183,000; and
    (2) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (H) Use the alternate VII clause in lieu of the alternate I clause 
in solicitations and contracts, except if the acquisition is of end 
products in support of operations in Afghanistan, when--
    (1) The estimated value is less than $92,319; and
    (2) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (I) Use the alternate VIII clause in lieu of the alternate II 
clause in solicitations and contracts when--
    (1) The estimated value is less than $183,000;
    (2) The acquisition is of end products in support of operations in 
Afghanistan; and
    (3) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (J) Use the alternate IX clause in lieu of the alternate III clause 
in solicitations and contracts when--
    (1) The estimated value is less than $92,319;
    (2) The acquisition is of end products in support of operations in 
Afghanistan; and
    (3) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive in accordance with FAR 25.101(d).
    (K) Use the alternate X clause in lieu of the alternate IV clause 
in solicitations and contracts, except if the acquisition is of end 
products in support of operations in Afghanistan, when--
    (1) The estimated value equals or exceeds $92,319 but is less than 
$100,000; and
    (2) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (L) Use the alternate XI clause in lieu of the alternate V clause 
in solicitations and contracts when--
    (1) The estimated value equals or exceeds $92,319 but is less than 
$100,000;
    (2) The acquisition is of end products in support of operations in 
Afghanistan; and
    (3) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
* * * * *

0
11. Amend section 225.7503 by--
0
a. Adding paragraphs (a)(3) and (4); and
0
b. Adding paragraphs (b)(5) through (8).
    The additions read as follows:


225.7503  Contract clauses.

    (a) * * *
    (3) Use the alternate II clause in lieu of the basic clause if an 
alternate domestic content threshold will apply to the entire period of 
performance as approved by the senior procurement executive (see 
225.101(d)), unless the acquisition is in support of operations in 
Afghanistan.
    (4) Use the alternate III clause in lieu of the alternate I clause 
if--

[[Page 11956]]

    (i) The acquisition is in support of operations in Afghanistan; and
    (ii) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (b) * * *
    (5) Use the alternate IV clause in lieu of the basic clause in 
solicitations and contracts, unless the acquisition is in support of 
operations in Afghanistan, when--
    (i) The estimated value is $12,001,460 or more; and
    (ii) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (6) Use the alternate V clause in lieu of the alternate I clause in 
solicitations and contracts, unless the acquisition is in support of 
operations in Afghanistan, when--
    (i) The estimated value is $7,032,000 or more; and
    (ii) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (7) Use the alternate VI clause in lieu of the alternate II clause 
in solicitations and contracts when--
    (i) The estimated value is $12,001,460 or more;
    (ii) The acquisition is in support of operations in Afghanistan; 
and
    (iii) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).
    (8) Use the alternate VII clause in lieu of the alternate III 
clause in solicitations and contracts when--
    (i) The estimated value is $7,032,000 or more but less than 
$12,001,460;
    (ii) The acquisition is in support of operations in Afghanistan; 
and
    (iii) An alternate domestic content threshold will apply to the 
entire period of performance as approved by the senior procurement 
executive (see 225.101(d)).

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
12. Amend section 252.225-7000--
0
a. By revising the provision date and paragraphs (a) and (c); and
0
b. In Alternate I, by revising the provision date and paragraphs (a) 
and (c).
    The revisions read as follows:


252.225-7000  Buy American--Balance of Payments Program Certificate.

* * * * *

Buy American--Balance of Payments Program Certificate--Basic (Feb 2024)

    (a) Definitions. Commercially available off-the-shelf (COTS) 
item, component, critical component, critical item, domestic end 
product, foreign end product, qualifying country, qualifying country 
end product, and United States, as used in this provision, have the 
meanings given in the 252.225-7001, Buy American and Balance of 
Payments Program--Basic clause of this solicitation.
* * * * *
    (c) Certifications and identification of country of origin.
    (1) For all line items subject to the Buy American and Balance 
of Payments Program--Basic clause of this solicitation, the Offeror 
certifies that--
    (i) Each end product, except those listed in paragraphs (c)(2) 
or (3) of this provision, is a domestic end product and that each 
domestic end product listed in paragraph (c)(4) of this provision 
contains a critical component or a critical item; and
    (ii) For end products other than COTS items, components of 
unknown origin are considered to have been mined, produced, or 
manufactured outside the United States or a qualifying country. For 
those end products that do not consist wholly or predominantly of 
iron or steel or a combination of both, the Offeror shall also 
indicate whether these foreign end products exceed 55 percent 
domestic content, except for those that are COTS items. If the 
percentage of the domestic content is unknown, select ``no''.
    (2) The Offeror certifies that the following end products are 
qualifying country end products:

------------------------------------------------------------------------
             Line item No.                      Country of origin
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------

    (3) The following end products are other foreign end products, 
including end products manufactured in the United States that do not 
qualify as domestic end products. For those foreign end products 
that do not consist wholly or predominantly of iron or steel or a 
combination of both, the Offeror shall also indicate whether these 
foreign end products exceed 55 percent domestic content, except for 
those that are COTS items. If the percentage of the domestic content 
is unknown, select ``no''.

------------------------------------------------------------------------
                                                          Exceeds 55%
          Line item No.            Country of origin   domestic content
                                      (If known)           (yes/no)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------

    (4) The Offeror shall separately list the line item numbers of 
domestic end products that contain a critical component or a 
critical item (see Federal Acquisition Regulation 25.105).
    Domestic end products containing a critical component or a 
critical item: Line Item Number [List as necessary]
* * * * *
    Alternate I. * * *

Buy American--Balance of Payments Program Certificate--Alternate I (Feb 
2024)

    (a) Definitions. Commercially available off-the-shelf (COTS) 
item, component, critical component, critical item, domestic end 
product, foreign end product, qualifying country, qualifying country 
end product, South Caucasus/Central and South Asian (SC/CASA) state, 
South Caucasus/Central and South Asian (SC/CASA) state end product, 
and United States, as used in this provision, have the meanings 
given in the 252.225-7001, Buy American and Balance of Payments 
Program--Alternate I clause of this solicitation.
* * * * *
    (c) Certifications and identification of country of origin.
    (1) For all line items subject to the Buy American and Balance 
of Payments

[[Page 11957]]

Program--Alternate I clause of this solicitation, the Offeror 
certifies that--
    (i) Each end product, except those listed in paragraphs (c)(2) 
or (3) of this provision, is a domestic end product and that each 
domestic end product listed in paragraph (c)(4) of this provision 
contains a critical component or a critical item; and
    (ii) For end products other than COTS items, components of 
unknown origin are considered to have been mined, produced, or 
manufactured outside the United States or a qualifying country. For 
those end products that do not consist wholly or predominantly of 
iron or steel or a combination of both, the Offeror shall also 
indicate whether these foreign end products exceed 55 percent 
domestic content, except for those that are COTS items. If the 
percentage of the domestic content is unknown, select ``no''.
    (2) The Offeror certifies that the following end products are 
qualifying country end products or SC/CASA state end products:

------------------------------------------------------------------------
             Line item No.                      Country of origin
------------------------------------------------------------------------
                                         .
------------------------------------------------------------------------

    (3) The following end products are other foreign end products, 
including end products manufactured in the United States that do not 
qualify as domestic end products. For those foreign end products 
that do not consist wholly or predominantly of iron or steel or a 
combination of both, the Offeror shall also indicate whether these 
foreign end products exceed 55 percent domestic content, except for 
those that are COTS items. If the percentage of the domestic content 
is unknown, select ``no''.

------------------------------------------------------------------------
                                                          Exceeds 55%
          Line item No.            Country of origin   domestic content
                                      (if known)           (yes/no)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------

    (4) The Offeror shall separately list the line item numbers of 
domestic end products that contain a critical component or a 
critical item (see Federal Acquisition Regulation 25.105).
    Domestic end products containing a critical component or a 
critical item: Line Item Number [List as necessary].
* * * * *

0
13. Amend section 252.225-7001--
0
a. By revising the clause date;
0
b. In paragraph (a)--
0
i. In the definition of ``Commercially available off-the-shelf (COTS) 
item'' paragraph (1)(i) by removing ``Federal Acquisition Regulation'' 
and adding ``Federal Acquisition Regulation (FAR)'' in its place;
0
ii. By adding, in alphabetical order, the definitions of ``Critical 
component'' and ``Critical item'';
0
iii. In the definition of ``Domestic end product'' by revising the 
first sentence of paragraph (1)(ii)(A) introductory text;
0
iv. In the definition of ``Qualifying country end product'' by revising 
paragraph (2)(i) introductory text;
0
c. By revising paragraph (b);
0
d. In Alternate I--
0
i. By revising the clause date;
0
ii. In paragraph (a)--
0
A. In the definition of ``Commercially available off-the-shelf (COTS) 
item'' paragraph (1)(i) by removing ``Federal Acquisition Regulation'' 
and adding ``Federal Acquisition Regulation (FAR)'' in its place;
0
B. By adding, in alphabetical order, the definitions of ``Critical 
component'' and ``Critical item'';
0
C. In the definition of ``Domestic end product'' by revising the first 
sentence of paragraph (1)(ii)(A) introductory text;
0
D. In the definition of ``Qualifying country end product'' by revising 
paragraph (2)(i) introductory text; and
0
e. By adding Alternate II and Alternate III.
    The revisions and additions read as follows:


252.225-7001  Buy American and Balance of Payments Program.

* * * * *

Buy American and Balance of Payments Program--Basic (Feb 2024)

    (a) * * *
    Critical component means a component that is mined, produced, or 
manufactured in the United States and deemed critical to the U.S. 
supply chain. The list of critical components is at FAR 25.105.
    Critical item means a domestic construction material or domestic 
end product that is deemed critical to the U.S. supply chain. The 
list of critical items is at FAR 25.105.
    Domestic end product means--
    (1) * * *
    (ii) * * *
    (A) The cost of its qualifying country components and its 
components that are mined, produced, or manufactured in the United 
States exceeds 60 percent of the cost of all its components, except 
that the percentage will be 65 percent for items delivered in 
calendar years 2024 through 2028 and 75 percent for items delivered 
starting in calendar year 2029, unless an alternate percentage is 
established for a contract in accordance with FAR 25.101(d), or 
award is made before January 1, 2030, for a foreign end product that 
exceeds 55 percent domestic content (see Defense Federal Acquisition 
Regulation Supplement 225.103(b)(ii)). * * *
* * * * *
    Qualifying country end product means--
* * * * *
    (2) * * *
    (i) The cost of the following types of components exceeds 60 
percent of the cost of all its components, except that the 
percentage will be 65 percent for items delivered in calendar years 
2024 through 2028 and 75 percent for items delivered starting in 
calendar year 2029, unless an alternate percentage is established 
for a contract:
* * * * *
    (b) This clause implements 41 U.S.C. chapter 83, Buy American. 
In accordance with 41 U.S.C. 1907, the component test of the Buy 
American statute is waived for an end product that is a COTS item 
(see FAR 12.505(a)(1)). Unless otherwise specified, this clause 
applies to all line items in the contract.
* * * * *
    Alternate I. * * *

Buy American and Balance of Payments Program--Alternate I (Feb 2024)

    (a) * * *
    Critical component means a component that is mined, produced, or 
manufactured in the United States and deemed critical to the U.S. 
supply chain. The list of critical components is at FAR 25.105.
    Critical item means a domestic construction material or domestic 
end product that is deemed critical to the U.S. supply chain. The 
list of critical items is at FAR 25.105.
    Domestic end product means--
    (1) * * *
    (ii) * * *
    (A) The cost of its qualifying country components and its 
components that are mined, produced, or manufactured in the United 
States exceeds 60 percent of the cost of all its components, except 
that the percentage will be 65 percent for items delivered in 
calendar years 2024 through

[[Page 11958]]

2028 and 75 percent for items delivered starting in calendar year 
2029, unless an alternate percentage is established for a contract 
in accordance with FAR 25.101(d), or award is made before January 1, 
2030, for a foreign end product that exceeds 55 percent domestic 
content (see Defense Federal Acquisition Regulation Supplement 
225.103(b)(ii)). * * *
* * * * *
    Qualifying country end product means--
* * * * *
    (2) * * *
    (i) The cost of the following types of components exceeds 60 
percent of the cost of all its components, except that the 
percentage will be 65 percent for items delivered in calendar years 
2024 through 2028 and 75 percent for items delivered starting in 
calendar year 2029, unless an alternate percentage is established 
for a contract:
* * * * *
    Alternate II. As prescribed in 225.1101(2)(i) and (2)(iv), use 
the following clause, which includes, in the definitions of 
``domestic end product'' at paragraph (1)(ii)(A) and ``qualifying 
country end product'' at paragraph (2)(i), the domestic content 
threshold that will apply to the entire contract period of 
performance.

Buy American and Balance of Payments Program--Alternate II (Feb 2024)

    (a) Definitions. As used in this clause--
    Commercially available off-the-shelf (COTS) item--
    (1) Means any item of supply (including construction material) 
that is--
    (i) A commercial product (as defined in paragraph (1) of the 
definition of ``commercial product'' in section 2.101 of the Federal 
Acquisition Regulation (FAR));
    (ii) Sold in substantial quantities in the commercial 
marketplace; and
    (iii) Offered to the Government, under a contract or subcontract 
at any tier, without modification, in the same form in which it is 
sold in the commercial marketplace; and
    (2) Does not include bulk cargo, as defined in 46 U.S.C. 
40102(4), such as agricultural products and petroleum products.
    Component means an article, material, or supply incorporated 
directly into an end product.
    Critical component means a component that is mined, produced, or 
manufactured in the United States and deemed critical to the U.S. 
supply chain. The list of critical components is at FAR 25.105.
    Critical item means a domestic construction material or domestic 
end product that is deemed critical to the U.S. supply chain. The 
list of critical items is at FAR 25.105.
    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; or
    (ii) An end product manufactured in the United States if--
    (A) The cost of its qualifying country components and its 
components that are mined, produced, or manufactured in the United 
States exceeds, for the entire period of performance for a contract 
awarded in: calendar year 2023, 60 percent of the cost of all its 
components; calendar years 2024 through 2028, 65 percent of the cost 
of all its components; or calendar year 2029 or later, 75 percent of 
the cost of all its components. The cost of components includes 
transportation costs to the place of incorporation into the end 
product and U.S. duty (whether or not a duty-free entry certificate 
is issued). Components of unknown origin are treated as foreign. 
Scrap generated, collected, and prepared for processing in the 
United States is considered domestic. A component is considered to 
have been mined, produced, or manufactured in the United States 
(regardless of its source in fact) if the end product in which it is 
incorporated is manufactured in the United States and the component 
is of a class or kind for which the Government has determined that--
    (1) Sufficient and reasonably available commercial quantities of 
a satisfactory quality are not mined, produced, or manufactured in 
the United States; or
    (2) It is inconsistent with the public interest to apply the 
restrictions of the Buy American statute; 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 or a qualifying country constitutes less than 5 
percent of the cost of all the components used in the end product 
(produced in the United States or a qualifying country means that 
all manufacturing processes of the iron or steel must take place in 
the United States or a qualifying country, except metallurgical 
processes involving refinement of steel additives). The cost of iron 
and steel not produced in the United States or a qualifying country 
includes but is not limited to the cost of iron or steel mill 
products (such as bar, billet, slab, wire, plate, or sheet), 
castings, or forgings, not produced in the United States or a 
qualifying country, utilized in the manufacture of the end product 
and a good faith estimate of the cost of all iron or steel 
components not produced in the United States or a qualifying 
country, excluding COTS fasteners. Iron or steel components of 
unknown origin are treated as foreign. If the end product contains 
multiple components, the cost of all the materials used in such end 
product is calculated in accordance with the explanation of cost of 
components in paragraph (1)(ii)(A) of this definition.
    End product means those articles, materials, and supplies to be 
acquired under this contract for public use.
    Foreign end product means an end product other than a domestic 
end product.
    Predominantly of iron or steel or a combination of both means 
that the cost of the iron and steel content exceeds 50 percent of 
the total cost of all its components. The cost of iron and steel is 
the cost of the iron or steel mill products (such as bar, billet, 
slab, wire, plate, or sheet), castings, or forgings utilized in the 
manufacture of the product and a good faith estimate of the cost of 
iron or steel components excluding COTS fasteners.
    Qualifying country means a country with a reciprocal defense 
procurement memorandum of understanding or international agreement 
with the United States in which both countries agree to remove 
barriers to purchases of supplies produced in the other country or 
services performed by sources of the other country, and the 
memorandum or agreement complies, where applicable, with the 
requirements of section 36 of the Arms Export Control Act (22 U.S.C. 
2776) and with 10 U.S.C. 2457. Accordingly, the following are 
qualifying countries:

Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Egypt
Estonia
Finland
France
Germany
Greece
Israel
Italy
Japan
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Slovenia
Spain
Sweden
Switzerland
Turkey
United Kingdom of Great Britain and Northern Ireland.

    Qualifying country component means a component mined, produced, 
or manufactured in a qualifying country.
    Qualifying country end product means--
    (1) An unmanufactured end product mined or produced in a 
qualifying country; or
    (2) An end product manufactured in a qualifying country if--
    (i) The cost of the following types of components exceeds, for 
the entire period of performance for a contract awarded in calendar 
year 2023, 60 percent of the cost of all its components; calendar 
years 2024 through 2028, 65 percent of the cost of all its 
components; or calendar year 2029 or later, 75 percent of the cost 
of all its components:
    (A) Components mined, produced, or manufactured in a qualifying 
country.
    (B) Components mined, produced, or manufactured in the United 
States.
    (C) Components of foreign origin of a class or kind for which 
the Government has determined that sufficient and reasonably 
available commercial quantities of a satisfactory quality are not 
mined, produced, or manufactured in the United States. Components of 
unknown origin are treated as foreign; or
    (ii) The end product is a COTS item.

[[Page 11959]]

    Steel means an alloy that includes at least 50 percent iron, 
between 0.02 and 2 percent carbon, and may include other elements.
    United States means the 50 States, the District of Columbia, and 
outlying areas.
    (b) This clause implements 41 U.S.C. chapter 83, Buy American. 
In accordance with 41 U.S.C. 1907, the component test of the Buy 
American statute is waived for an end product that is a COTS item 
(see FAR 12.505(a)(1)). Unless otherwise specified, this clause 
applies to all line items in the contract.
    (c) The Contractor shall deliver only domestic end products 
unless, in its offer, it specified delivery of other end products in 
the Buy American--Balance of Payments Program Certificate provision 
of the solicitation. If the Contractor certified in its offer that 
it will deliver a qualifying country end product, the Contractor 
shall deliver a qualifying country end product or, at the 
Contractor's option, a domestic end product.
    (d) The contract price does not include duty for end products or 
components for which the Contractor will claim duty-free entry.

(End of clause)

    Alternate III. As prescribed in 225.1101(2)(i) and (2)(v), use 
the following clause, which includes, in the definitions of 
``domestic end product'' at paragraph (1)(ii)(A) and ``qualifying 
country end product'' at paragraph (2)(i), the dom