DOD, GSA, and NASA to Implement Korea FTA's Lowered Procurement Thresholds

March 13, 2012

On March 7, 2012, the Department of Defense (DOD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA), published an interim rule in the Federal Register (77 FR 13952) amending the Federal Acquisition Regulation (FAR) to implement the United States-Korea Free Trade Agreement (Korea FTA). While the Republic of Korea is already a party to the World Trade Organization (WTO) Government Procurement Agreement, the DOD, GSA, and NASA issued the interim rule because the Korea FTA implements a lower procurement threshold. The Korea FTA lowers the procurement threshold for supplies and services from the WTO level of $202,000 to $100,000. According to the interim rule, the $100,000 Korea FTA threshold for supplies and services from Korea is higher than the threshold for most FTAs, but not as high as those with Bahrain, Morocco, Oman and Peru. Therefore, new alternates are required for the Buy American Act – Free Trade Agreements – Israeli Trade Act provision and clause in FAR. Additionally, the Korea FTA construction threshold is $7,777,000, which is identical to the WTO Government Procurement Agreement threshold.

The interim rule is effective March 15, 2012. Comments on the interim rule will be accepted until May 7, 2012.

For further information, please contact a Barnes/Richardson attorney.