98-o0001

OFFICE OF THE UNDER SECRETARY OF DEFENSE

3000 DEFENSE PENTAGON

WASHINGTON DC 2030-3000

DP (DAR)

MEMORANDUM FOR DIRECTORS OF DEFENSE AGENCIES

DEPUTY FOR ACQUISiTION BUSINESS MANAGEMENT,

ASN (RD &A) /ABM

DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE (CONTRACTING), SAF/AQC

DEPUTY ASSISTANT SECRETARY OF THE ARMY (PROCUREMENT)

DEPUTY DIRECTOR (ACQUISITION), DEFENSE LOGISTICS AGENCY

SUBJECT: Trade Agreements Thresholds- Class Deviation

Effective immediately, all military departments and defense agencies shall use the attached modified text in lieu of the corresponding Federal Acquisition Regulation text. The modified text revises certain trade agreements thresholds in FAR Part 25.

These Trade Agreements Act and North American Free Trade Agreement Act thresholds were published by the Office of the United States Trade Representative in the Federal Register on January 14, 199B (63 FR 2295). The new thresholds were effective on January 1, 1998.

This class deviation will remain in effect until the FAR is revised.

Eleanor R. Spector

Director, Defense Procurement

Attachment

FAR Class Deviation

Tracking Number 98-O0001

Trade Agreements Thresholds

PART 25 F0REIGN ACQUISIT0N

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25.105 Evaluating offers.

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(d) The eva1uation in paragraph (a) ofthis section shall not be applied to offers of lsraeli end products at or above $50,000 (see 25.402(a)(2)).

(e) The evaluation in paragraph (a) of this section shall not be applied to offers of Canadian end products above $25,000 [or Mexican end products above $53,150] (see 25.402(a)(3)[(ii)]). For the defmition[s] of "Canadian end product-," [and "Mexican end product,"] see 25.401.

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25.202 Policy.

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(d) For construction contracts with an acquisition value of [$6,909,500] or more, but less than [$7,143,O00], see 25.402(a)(3). If the acquisition value is[$7,143,000] or more, see 25.402(a)(l).

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25.207 Solicitafion provisions and contract clauses.

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(d)(l) The contracting officer shall insert the clause at 52.225-15, Buy American Act-- Construction

Materials under Trade Agreements Act and North Anierican Free Trade Agreement, in solicitations and

contracts for construction inside the United States with an estiniated acquisition value of

[$7,143,000] or more.

(2) For solicitations and contracts for construction inside the United States with an estimated acquisition value of [$6,909,500] or more, but less than [$7,143,000], the contracting officer shall use the clause with its Alternate I.

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Subpart 25-- Balance of Payments Program

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25.305 Solicitation provisions and conti'act dauses.

(c) Contract clauses. ***

(2) For construction contracts outside the United States, with an estimated value of$ [6,909,500] or more, insert the clause at 52.225-22, Balance of Payments Prograrn-- Construction Materials-- NAFTA.

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Subpart 25.4-- Trade Agreements

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25.402 Policy.

(a)(1) Executive Order 12260 requires the U.S. Trade Representative to set the dollar threshold for application of the Trade Agreements Act. The curent threshold is [$186,000] for supply and services contracts and [$7,143,000] for construction contracts. The thresholds will be published in the Federal Register and will be distributed through agency procedures on an expedited basis. When the value of the proposed acquisition of an eligible product is estimated to be at or over the dollar threshold, agencies slal1 evaluate offers for an eligible product without regard to the restrietions of the Buy American Act (see Subpart 25.1) or the Balance of Payments Program (see Subpart 25.3). When the value of the proposed construction contract is estimated to be at or over the dollar threshold, agencies shall evaluate offers of designated country construction materials without regard to the restrictions of the Buy American Act (see Subpart 25.2) or the Balance of Payments Program (see Subpart 25.3). When the value of the proposed acquisition is estimated to be below the Trade Agreements Act threshold, the restrictions of the Buy American Act or the Balance of Payments Program shall be applied to foreign offers, except as noted in paragraphs (a)(2) and (a)(3) of this section (see 25.105).

(2) As required by Article 15 of the U.S.-Israel Free Trade Area Agreement, agencies other than the Department of Defense, Department of Energy, Department of Transportation, the Bureau of Reclamation of the Department of the Interior, the Federal Housing Finance board, and the Office of Thrift Supervision shall evaluate offers of Israeli and products at or above $50,000 in amount without regard to the restriction of the Buy American Act (see Subpart 25.1) or the Balance of Payments Program (see Subpart 25.3).

(3) As required by the North American Free Trade Agreement (NAFTA) Implementation Act (Pub. L, 103-183, 107 Stat. 2057), agencies shall evaluate offers of the following NAFTA country end products without regard to the restrictions of the Buy American Act (see Subpart 25.1) or the Balance of Payments Program (see Subpart 25.3):

(in) NAFTA country construction materials under construction contracts with an estimated acquisition value of [$,909,500] or more.

(ii) Canadian end products under supply contracts with an estimated value above $25,000 and Mexican end products under supply contracts with an estimated value of [$53,150] or more.

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25.408 Sohcitation provisions and conitract clauses.

(a) The contracting officer shall insert--

(3) The provision at 52.225-20, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program Certificate, in solicitations containing the clause at 52.225-21. Use the provision with its Alternate in if the acquisition value is between $25,000 and [$53,150]; and

(4) The clause at 52.225-21, Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program, in solicitations and contracts for supplies where the contracting officer has determined that the acquisition is not subject to the Trade Agreements Act but is subject to NAFTA. Use the clause with its Alternate in if the acquisition value is between $25,000 and [$53,150].

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Subpart 25.10--Implementation of Sanctions Against Counties that discriminate Against United States Products or Services in Government Procurement

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25.1002 (Deviation) Trade Sanctions.

(1) Sanctioned EU end products with an estimated acquisition value less than [$186,000].

(2) Sanctioned EU construction with an estimated acquisition value less than [$7,143,000].

(3) Sanctioned EU service contracts as follows:

(in) Service contracts with an estimated acquisition value less than [$186,000].

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25.1003 (Deviation) Contract clauses.

Except as provided in 25.1002(b) and (c)--

(in) Services with an estimated acquisition value less than [$186,000]; and

(2)***

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