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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: January 7, 2004

SUBJECT: Federal Acquisition Circular (FAC) 2001-19, SF 330 Effectivity Delay and Free Trade Acts

SOURCE: Federal Register, January 7, 2004, Vol. 69, No. 4, page 1049

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Delay in Effective Date and Interim Rule

SYNOPSIS: The Federal Acquisition Secretariat is issuing FAC 2001-19 to amend the Federal Acquisition Regulation (FAR) in the following areas: (1) delay the effective date of the new consolidated Standard Form (SF) 330, Architect-Engineer Qualifications; and (2) Chile and Singapore Free Trade Agreements, and trade agreements thresholds.

DATES: The effective date of the SF 330 is delayed to June 8, 2004, and effective date for item (2) is January 1, 2004. Comments on item (2) must be submitted on or before March 8, 2004.

ADDRESSES: Comments on item (2) must be submitted to General Services Administration, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, Attn: Laurie Duarte, Washington, DC 20405; or by e-mail to farcase.2003-016@gsa.gov. Cite "FAC 2001-19, FAR case 2003-016" in correspondence related to the interim rule.

FOR FURTHER INFORMATION CONTACT: Cecelia Davis, 202-219-0202. For general information, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, 202-501-4755.

SUPPLEMENTAL INFORMATION: (1) Delay of Effective Date of New Consolidated Standard Form (SF) 330, Architect-Engineer Qualifications: Item (1) of FAC 2001-18 replaced the SF 254, Architect-Engineer and Related Services Questionnaire, and the SF 255, Architect-Engineer and Related Services Questionnaire for Specific Projects, with the SF 330, Architect-Engineer Qualifications (see the December 11, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-18, Miscellaneous Amendments"). The effective date of the SF 330 and the related FAR changes was to be January 12, 2004. However, the architect-engineer industry has requested that the effective date be changed to allow them more time to prepare before the SF 330 is effective. Therefore, the effective date for use of the SF 330 is changed to June 8, 2004. Agencies are to continue to use the SF 254 and SF 255 until the SF 330 becomes effective. (EDITOR'S NOTE: While SF 330 was to become effective January 12, 2004, the introduction to the FAC 2001-18 rule provided that "agencies may delay implementation of this final rule until June 8, 2004, at which time it becomes mandatory for all agencies and their solicitations issued on or after that date." In other words, this delay converts the optional action into a mandatory one.)


(2) Chile and Singapore Free Trade Agreements, and Trade Agreements Thresholds: This interim rule amends FAR Part 25, Foreign Acquisitions, and the related clauses in FAR Part 52 to implement the the United States-Chile Free Trade Agreement Implementation Act (USCFTA) (Public Law 108-77) and United States-Singapore Free Trade Agreement Implementation Act (USSFTA) (Public Law 108-78). In addition, this rule implements new dollar thresholds for application of trade agreements as determined by the United States Trade Representative (USTR) (see the December 19, 2003, FEDERAL CONTRACTS DISPATCH "Procurement Thresholds for Implementation of Trade Agreements Act").

To implement the USCFTA and the USSFTA, the term "North American Free Trade Agreement" (NAFTA) is replaced by the term "Free Trade Agreements" (FTA), which encompasses NAFTA, USCFTA, USSFTA, and any future free trade agreements into which the United States may enter (FAR 25.003, Definitions, and FAR 25.400, Scope of Subpart). In addition, "NAFTA country" and "NAFTA country end product" have been replaced in FAR 25.003 with "Free Trade Agreement country" and "Free Trade Agreement country end product."

Also, the definition of "eligible product" in FAR 25.003 is modified to include services. Although services are not subject to the Buy American Act, the trade agreements "specify procurement procedures designed to ensure fairness" unless the service is excluded by the trade agreement (see paragraph (b) of FAR 25.401, Exceptions). Since the Trade Agreements Act requires that "only U.S.-made end products or U.S. services, or eligible products, including services, may be acquired," paragraph (a) of FAR 25.402, General, now directs the contracting officer to "determine the origin of services by the country in which the firm providing the services is established." This expands the concept that had been in paragraph (c) of FAR 25.405, North American Free Trade Agreement (NAFTA) (FAR 25.405 is renamed "Free Trade Agreements (FTA)" as indicated above).

Furthermore, both the USCFTA and the USSFTA provide for arbitration of certain claims. However, the United States is authorized to resolve any claim against the United States covered by the applicable Free Trade Agreement section relating to investor-state disputes settlement. Since the USCFTA and USSFTA require that contracts specify the law that will apply to resolve any breach of contract claim, the statement "United States law will apply to resolve any claim of breach of contract" has been included in each of the trade agreements clauses (paragraph (d) of FAR 52.225-3, Buy American Act -- Free Trade Act -- Israeli Trade Act Certificate; paragraph (c) of FAR 52.225-5, Trade Agreements; and paragraph (e) of FAR 52.225-11, Buy American Act -- Construction Materials Under Trade Agreements), rather than creating a separate clause. Comments are invited on the appropriate implementation of this authorization.

Finally, on December 19, 2003, the USTR published a decision to adjust the U.S. dollar thresholds for the application of the Trade Agreements Act and NAFTA. This interim rule adjusts the thresholds throughout FAR Part 25, and provides the following table of the various thresholds in FAR 25.402(a) "because of the increasing number of trade agreements and thresholds":

Trade AgreementSupply Contract
(equal to or exceeding)
Service Contract
(equal to or exceeding)
Construction
(equal to or exceeding)
Trade Agreements Act and
Caribbean Basin Trade Initiative
$175,000$175,000$6,725,000
FTAs
      NAFTA -- Canada$25,000$25,000$7,611,532
      NAFTA -- Mexico$58,550$58,550$7,611,532
      Chile FTA$58,550$58,550$6,725,000
      Singapore FTA$58,550$58,550$6,725,000
Israeli Trade Act$50,000--       --      

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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