[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]
[Rules and Regulations]
[Pages 37695-37696]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14618]





48 CFR Parts 25 and 52

[FAC 2005-67; FAR Case 2012-027; Item IX; Docket 2012-0027, Sequence 1]
RIN 9000-AM43

Federal Acquisition Regulation; Free Trade Agreement (FTA)-Panama

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

ACTION: Final rule.


SUMMARY: DoD, GSA, and NASA have adopted as final, without change, an 
interim rule amending the Federal Acquisition Regulation (FAR) to 
implement the United States-Panama Trade Promotion Agreement. This 
Trade Promotion Agreement is a free trade agreement that provides for 
mutually non-discriminatory treatment of eligible products and services 
from Panama.

DATES: Effective Date: June 21, 2013.

FOR FURTHER INFORMATION CONTACT: Ms. Cecelia L. Davis, Procurement 
Analyst, at 202-219-0202, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAC 2005-67, FAR Case 2012-


I. Background

    DoD, GSA, and NASA published an interim rule in the Federal 
Register at 77 FR 69723, on November 20, 2012, to implement the United 
States-Panama Trade Promotion Agreement. The comment period closed on 
January 22, 2013. Two respondents submitted comments on the interim 
    The interim rule added Panama to the definition of ``Free Trade 
Agreement country'' in multiple locations in the FAR. The Panama FTA 
covers acquisitions of supplies and services equal to or exceeding 
$202,000. The threshold for the Panama FTA is $7,777,000 for 
construction contracts. The Panama FTA threshold for supplies and 
services is higher than the threshold for supplies and services for 
most of the FTAs ($77,494), and equals the Bahrain, Morocco, Oman, and 
Peru FTA thresholds for supplies and services ($202,000). The excluded 
services for the Panama FTA are the same as for the Bahrain FTA, 
Dominican Republic--Central American FTA, Chile FTA, Colombia FTA, 
NAFTA, Oman FTA, and Peru FTA.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the comments in the 
development of the final rule. A discussion of the comments is provided 
as follows:

A. Summary of Significant Changes

    The Councils have adopted the interim rule as final without change.

B. Analysis of Public Comments

1. Need for Separate Defense Federal Acquisition Regulation Supplement 
(DFARS) Rule
    Comment: One respondent commented that they were concerned about 
the necessity of the interim rule, under Executive Orders 12866 and 
13563, for a separate, redundant DFARS rule for the Free Trade 
    Response: Implementation of trade agreements in the FAR is 
necessary for broad government-wide application of the trade 
agreements. DoD needs its unique provisions and clauses to cover Buy 
American and trade agreements because of unique requirements. One of 
the most significant reasons is the need to address the products of 
qualifying countries (those countries with which DoD has a Reciprocal 
Defense Procurement Memorandum of Understanding or other International 
Agreement). In addition, the Oman FTA and the Israeli Trade Agreement 
do not apply to DoD acquisitions. There are also statutory and policy 
determinations that impact DoD acquisitions of the products of Iraq and 
Afghanistan and other countries in the region (South Caucasus and 
Central and South Asia). DoD also continues to implement the Balance of 
Payments Program, applying the principles of the Buy American statute 
to acquisitions of goods for use outside the United States. Therefore, 
DoD has never been able to rely on promulgation of Free Trade 
Agreements solely within the FAR.
2. Information Collection Requirement
    Comment: One respondent was further concerned that the information 
collection requirement is not negligible as characterized by the DFARS 
interim rule. According to the respondent, the DFARS requirement will 
require costly duplicate reporting in order to maintain compliance and 
is therefore not negligible.
    Response: The Federal Register preamble for the FAR and DFARS rules 
did not state that the information collection requirement relating to 
Free Trade Agreements was negligible. The statement was that the change 
caused by adding Panama as a Free Trade Agreement country is 
negligible. There are approved burdens for the FAR Buy American and 
trade provisions under OMB clearance numbers 9000-0025, 9000-0130, 
9000-0136, and 9000-0141. There are also burden hours approved for DoD 
acquisitions subject to Buy American or trade agreements under OMB 
clearance number 0704-0229. The DFARS requirement does not cause 
duplicate reporting, because no solicitation should include both the 
FAR and the DFARS Buy American and/or trade agreements provision. The 
DFARS provisions are used in lieu of the FAR provisions.
3. Access Through Canal and Security for Cargo
    Comment: One respondent commented that we should work with other 
companies for joint economic development projects and, as to Panama, 
make certain that the agreements provide that we will have continued 
access through the canal and the necessary security for our cargo.
    Response: The Council takes no position on this comment because it 
is outside the scope of this case, which was limited to implementing 
the United States-Panama Trade Promotion Agreement. The Office of the 
United States Trade Representative negotiates the treaties, which are 
then implemented in law by Congress.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This

[[Page 37696]]

rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because although the rule now 
opens up Government procurement to the goods and services of Panama, 
DoD, GSA, and NASA do not anticipate any significant economic impact on 
U.S. small businesses. The Department of Defense only applies the trade 
agreements to the non-defense items listed at DFARS 225.401-70, and 
acquisitions that are set aside or provide other form of preference for 
small businesses are exempt. FAR 19.502-2 states that acquisitions of 
supplies or services with an anticipated dollar value between $3,000 
and $150,000 (with some exceptions) are automatically reserved for 
small business concerns.

V. Paperwork Reduction Act

    The rule affects the certification and information collection 
requirements in the provisions at FAR 52.212-3, 52.225-4, 52.225-6, and 
52.225-11 currently approved under the OMB Control Numbers 9000-0136, 
titled: Commercial Item Acquisition; 9000-0130, titled: Buy American 
Act-Free Trade Agreements-Israeli Trade Act Certificate; 9000-0025, 
titled: Trade Agreements Certificate; and 9000-0141, titled: Buy 
American-Construction, respectively, in accordance with the Paperwork 
Reduction Act (44 U.S.C. chapter 35). The impact, however, is 
negligible, because it is just a question of which category offered 
goods from Panama would be listed under.

List of Subjects in 48 CFR Parts 25 and 52

    Government procurement.

    Dated: June 13, 2013.
William Clark,
Acting Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR parts 25 and 52, which 
was published in the Federal Register at 77 FR 69723, on November 20, 
2012, is adopted as a final rule without change.

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

[FR Doc. 2013-14618 Filed 6-20-13; 8:45 am]