This class deviation is effective July 1, 2020 and implements the United States-Mexico-Canada Agreement (USMCA), as enacted by Congress in the United States-Mexico-Canada Agreement Implementation Act. Chapter 13 of the USMCA (government procurement) applies only to the United States and Mexico and as a result, Canada is no longer a Free Trade Agreement country. Consequently, this class deviation replaces all references in the FAR and DFARS to NAFTA and 19 U.S.
As prescribed in 225.7503(b) and (b)(1), use the basic or an alternate of the clause at 252.225-7045, Balance of Payments Program—Construction Material Under Trade Agreements, in solicitations and contracts for construction to be performed outside the United States with an estimated value of $6,932,000 or more, including acquisitions of commercial items or components.
(1) Use the basic clause in solicitations and contracts with an estimated value of $10,441,216 or more, unless the acquisition is in support of operations in Afghanistan.
(2) Use the alternate I clause in solicitations and contracts with an estimated value of $6,932,000 or more, but less than $10,441,216 unless the acquisition is in support of operations in Afghanistan.
(3) Use the alternate II clause in solicitations and contracts with an estimated value of $10,441,216 or more and is in support of operations in Afghanistan.
(4) Use the alternate III clause in solicitations and contracts with an estimated value of $6,932,000 or more, but less than $10,441,216, and is in support of operations in Afghanistan.
BALANCE OF PAYMENTS PROGRAM—CONSTRUCTION MATERIAL UNDER TRADE AGREEMENTS—BASIC (DEVIATION 2020-O0019) (JUL 2020)
(a) Definitions. As used in this clause—
“Caribbean Basin country construction material” means a construction material that—
(i) Is wholly the growth, product, or manufacture of a Caribbean Basin
country; or
(ii) In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in a Caribbean Basin country into a new and different construction material distinct from the materials from which it was transformed.
“Commercially available off-the-shelf (COTS) item”—
(i) Means any item of supply (including construction material) that is—
(A) A commercial item (as defined in paragraph (1) of the definition of “commercial item” in section 2.101 of the Federal Acquisition Regulation);
(B) Sold in substantial quantities in the commercial marketplace; and
(C) 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
(ii) Does not include bulk cargo, as defined in section 3 of the Shipping Act of 1984 (46 U.S.C. 40102), such as agricultural products and petroleum products.
“Component” means any article, material, or supply incorporated directly into construction material.
“Construction material” means an article, material, or supply brought to the construction site by the Contractor or a subcontractor for incorporation into the building or work. The term also includes an item brought to the site preassembled from articles, materials, or supplies. However, emergency life safety systems, such as emergency lighting, fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building or work and that are produced as complete systems, are evaluated as a single and distinct construction material regardless of when or how the individual parts or components of those systems are delivered to the construction site. Materials purchased directly by the Government are supplies, not construction material.
“Cost of components” means—
(i) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or
(ii) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the construction material.
“Designated country” means—
(i) A World Trade Organization Government Procurement Agreement (WTO GPA) country (Armenia, Aruba, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Montenegro, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Taiwan (known in the World Trade Organization as “the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu” (Chinese Taipei)), Ukraine, or the United Kingdom);
(ii) A Free Trade Agreement country (Australia, Bahrain, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Korea (Republic of), Mexico, Morocco, Nicaragua, Panama, Peru, or Singapore);
(iii) A least developed country (Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, South Sudan, Tanzania, Timor-Leste, Togo, Tuvalu, Uganda, Vanuatu, Yemen, or Zambia); or
(iv) A Caribbean Basin country (Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bonaire, British Virgin Islands, Curacao, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saba, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Sint Eustatius, Sint Maarten, or Trinidad and Tobago).
“Designated country construction material” means a construction material that is a WTO GPA country construction material, a Free Trade Agreement country construction material, a least developed country construction material, or a Caribbean Basin country construction material.
“Domestic construction material” means—
(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 50 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; or
(B) The construction material is a COTS item.
“Free Trade Agreement country construction material” means a construction material that—
(i) Is wholly the growth, product, or manufacture of a Free Trade Agreement country; or
(ii) In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in a Free Trade Agreement country into a new and different construction material distinct from the material from which it was transformed.
“Least developed country construction material” means a construction material that—
(i) Is wholly the growth, product, or manufacture of a least developed country; or
(ii) In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in a least developed country into a new and different construction material distinct from the materials from which it was transformed.
“United States” means the 50 States, the District of Columbia, and outlying areas.
“WTO GPA country construction material” means a construction material that—
(i) Is wholly the growth, product, or manufacture of a WTO GPA country;
or
(ii) In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in a WTO GPA country into a new and different construction material distinct from the materials from which it was transformed.
(b) This clause implements the Balance of Payments Program by providing a preference for domestic construction material. In addition, the Contracting Officer has determined that the WTO GPA and Free Trade Agreements apply to this acquisition. Therefore, the Balance of Payments Program restrictions are waived for designated country construction materials.
(c) The Contractor shall use only domestic or designated country construction material in performing this contract, except for—
(1) Construction material valued at or below the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation;
(2) Information technology that is a commercial item; or
(3) The construction material or components listed by the Government as follows:
___________________________________________________________________________
[Contracting Officer to list applicable excepted materials or indicate “none”]
(End of clause)
NONE