2.  Exemptions

Comment: One respondent was concerned that the language in 252.225-7016 is unchanged from the currently existing exemption.

a.  According to the respondent, by allowing the same exemption and lowering the content requirement to 50 per cent, a bearing used in assembly for a military application may be sourced from anywhere in the world, including countries that have less sophisticated production capabilities. The respondent recommended revision of the exemptions to require manufacture of domestically nonavailable ball or roller bearings in a designated country.

b.  The respondent also mentioned that when the Government needs to buy a spare or replacement foreign commercial bearing, it cannot do so without a waiver.

Response:

a.  This case is only concerned with the definition of what constitutes a domestic bearing, based on statutory change. The definition of a domestic bearing still requires manufacture in the United States, its outlying areas, or Canada. There was no change in the statute regarding the exemptions from these requirements.

b.  The issue relating to problems of buying spare or replacement foreign commercial bearings is also a problem of the current regulation, and is a direct result of the statutory lack of exceptions when buying commercial ball or roller bearings as the end item rather than as a component.