DoD Requests Comments on Proposed Rule for Foreign Participation in Acquisitions in Support of Operations in Afghanistan

January 6, 2010

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement: Waiver of the section 302(a) of the Trade Agreements Act of 1979, as amended, which prohibits acquisitions of products or services from non-designated countries, in order to allow acquisition from the nine South Caucasus/Central and South Asian (SC/CASA) states; and Determination of inapplicability of the Balance of Payments Program evaluation factor to offers of products (other than arms, ammunition, or war materials) from the SC/CASA states to support operations in Afghanistan. Reference Federal Register January 6, 2010 (Volume 75, Number 3).

On July 9, 2009, the Deputy Secretary of Defense issued a waiver of the procurement prohibition of Section 302(a) of the Trade Agreements Act of 1979 with regard to acquisitions by the Department of Defense or by the General Services Administration, on behalf of DoD, in support of operations in Afghanistan. This waiver applies to offers of products and services from the following nine South Caucasus/Central and South Asian (SC/CASA) states: Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan. This waiver was authorized by the United States Trade Representative by letter of June 2, 2009. In addition, the Deputy Secretary of Defense also made a determination that it would be inconsistent with the public interest to apply the provisions of the Balance of Payments Program to offers of products (other than arms, ammunition, or war materials) and construction materials from these SC/CASA states acquired in direct support of operations in Afghanistan. For purposes of this rule, the term ``products other than arms, ammunition, or war materials'' equates to the products listed at DFARS 225.401-70.

The draft proposed rule adds a new section 225.7704 to Subpart 225.77, Acquisitions in Support of Operations in Iraq or Afghanistan, to specifically address the two determinations by the Deputy Secretary of Defense relating to acquisitions in support of operations in Afghanistan. More specifically, in order to implement the waiver of the Trade Agreements Act of 1979 prohibition on acquisitions of products or services from non-designated countries, the proposed rule--

Adds in the subpart on Trade Agreements (225.401 and 225.403) cross references to 225.7704-1; Adds alternates to the trade agreements provision and clause (252.225-7020 and -7021, with conforming changes to the provision and clause prescriptions at 225.1101 paragraphs (5) and (6)); and Adds a requirement to the clauses at 252.225-7021 and 252.225-7045 that the contractor shall inform its government of its participation in the acquisition and that it generally will not have such opportunity in the future unless its government provides reciprocal procurement opportunities to U.S. products and services and suppliers of such products and services.

In order to implement the determination of the inapplicability of the Balance of Payments Program to end products and construction material from the SC/CASA states, the proposed rule--

Modifies Subpart 225.5, to provide that whenever the acquisition is in support of operations in Afghanistan, offers of end products (other than arms, ammunition, and war materials) from SC/CASA states shall be treated the same as qualifying country offers; Modifies Subpart 225.75, Balance of Payments Program, to provide exceptions in 225.7501(b)(1)(iii) and (b)(2), with cross references to 225.7704-2; Adds alternates to the Balance of Payments Program provisions and clauses at 252.225-7000, -7001, -7035, -7036-7044, and -7045, with conforming changes to the provision and clause prescriptions at 225.1101 paragraphs (1), (2), (10), and (11) and 225.7503.

Other changes:

Definitions of ``South Caucasus/Central and South Asian (SC/CASA) state,'' SC/CASA state construction material, and ``SC/CASA state end product'' have been added at 225.003, because these terms are used in more than one subpart.

Conforming change were made to the clause dates in 252.212-7001.

A correction is made to Alternate I of 252.225-7035 to delete the phrase "Australian or'' from paragraph (c)(2)(i). It was overlooked when the Free Trade Agreement with Australia was added that Alternate I also required revision (when only trade agreement with Canada is applicable).

A correction is made to the paragraph number of Canadian end product of Alternate I 252.225-7036 to conform to changes to the paragraph number of ``Free Trade Agreement end product'' in the basic clause of 252.225-7036.

A correction is made to Alternate I of 252.225-7045, to add in paragraph (b), line 4, that the Bahrain Free Trade Agreement does not apply.

Comments on the proposed rule should be submitted in writing to the address shown below on or before March 9, 2010 to be considered in the formulation of the final rule. You may submit comments, identified by DFARS Case 2009-D012, using any of the following methods: