A Countable Test for “Foreign-Produced”

I. Introduction, Interest, and Scope

Gatewell Group LLC responds to the Department's Request for Information. Question numbers appear in the headings below.

Role and basis of experience (A-1). Gatewell is a Los Angeles firm. It is an advisory firm on origin evidence, which is to say on what records establish that an article was manufactured, produced, or assembled in a stated place. It serves purchasers in the United States and manufacturers selling into the United States. Gatewell is not an asset owner or operator, a manufacturer, a supplier, a developer, an installer, or a distributor of bulk-power system electric equipment. It responds as a service provider to purchasers and manufacturers.

The basis for that experience is the firm's advisory work on origin evidence for buyers and manufacturers, the documentation standard it publishes, and its participation in proceedings that turn on origin documentation. At the Federal Communications Commission, Gatewell filed comments in ET Docket No. 21-232 on August 20, 2026 (ECFS 26110072507) and reply comments on September 17, 2026 (ECFS 26110076947), and comments in PS Docket Nos. 26-184 and 26-189 on August 18, 2026 (ECFS 26110071980, 26110071981, and 26110071982). It filed comments in DFARS Case 2022-D011 on August 20, 2026, posted as DARS-2026-0298-0012.

Interest. Gatewell's interest is commercial and is stated here in full. Gatewell advises buyers and manufacturers on Covered List exposure and origin evidence. It publishes the Gatewell Protocol for Origin Evidence, an open documentation standard for the evidence file behind a not-covered certification, and it sells services assembling and verifying files under that standard. The text is licensed for reuse under the Creative Commons Attribution 4.0 license, and Version 1.0 is a public comment draft, open for comment through October 31, 2026. The current text, Revision 3 of September 17, 2026, is Attachment A and is published at gatewellgroup.com/protocol/v1.0. Gatewell does not ask the Department to adopt, reference, or endorse that standard, and nothing recommended below would require any party to retain Gatewell or another third party.

Scope. This response addresses (A-1), (A-2), (A-5), (A-5)(a), (A-5)(c), and the safeguards sentence of (A-6). Gatewell takes no position on the remaining questions, including transaction review, licensing, the § 2(e) list, mitigation, existing equipment, Federal procurement preferences, and the cost and burden questions put by (A-3) and questions B through G. Statements below about the records a manufacturer already holds are made in answer to (A-5)(c)'s question about what can reasonably be provided. Gatewell recommends below that the Department borrow a cost-of-components definition from the Federal Acquisition Regulation. It takes no position on whether bulk-power system electric equipment should receive any Federal procurement preference. As to (A-5)(b), Gatewell states one point and no more. Whether software, firmware, services, or remote-access capabilities were "designed, developed, manufactured, or supplied" by a person tied to a Covered Foreign Entity, 91 FR at 57325, is a question about entities, distinct from the question of place put by the opening sentence of (A-5).

II. Question (A-5): The Domestic Side of "Foreign-Produced" Needs Stated Documentary Content

The order defines the term by exclusion. "The term 'foreign-produced' means an article that is not manufactured, produced, or assembled in the United States." Exec. Order No. 14421 § 5(c), 91 FR 55995 (Aug. 31, 2026). The definition does its work through its domestic side, and the order does not state what that side requires. (A-5) asks "what facts should DOE consider when determining whether an article is manufactured, produced, or assembled in the United States?" 91 FR at 57325. The domestic side should be stated as a test with countable content, in the rules the Department publishes under § 3(b), which directs that the Secretary "shall publish rules or regulations implementing the authorities delegated ... as needed."

Recommendation. Define the domestic side of § 5(c) by two elements that must both be satisfied:

1. Manufacture of the end product in the United States at an identified site, stated by name, city, and State.

2. Domestic components exceeding a stated share of the cost of components computed under 48 CFR 25.003.

The order states three ways an article can be domestic. Nothing in this recommendation reads any of them out. It states what documentary content each requires, so that "assembled in the United States" is a fact a party can show rather than a label it can apply. A rule that gives the words content is not a rule that narrows them.

A share is already stated for one of the categories the order names in § 5(b), in a Federal definition built on the same two words. That share is stated in DA 26-870, released by the Commission's Public Safety and Homeland Security Bureau on August 20, 2026 on the Department of War's Second Power Inverter National Security Determination of August 19, 2026. It defines "Foreign-produced power inverters" to cover power inverters "that are not either" (a) "Eligible for the Advanced Manufacturing Tax Credit in 26 U.S. Code § 45X for domestic production" or (b) "A domestic end product as defined in 48 CFR § 25.101(a) because they are manufactured in the United States and the cost of domestic components exceeds 65% of the total component cost for items delivered in calendar years 2024 through 2028 or 75% for items delivered starting in calendar year 2029." DA 26-870 (PSHSB rel. Aug. 20, 2026). The definition that provision applies is stated at 48 CFR 25.003, which carries the percentage schedule. Gatewell recommends the same shares. It recommends the § 45X route as a stated alternative for the equipment classes § 45X covers, and notes two facts the Department should resolve on the record before adopting it. § 45X carries no domestic-content floor of its own, and what operations qualify as "production" under § 45X for this purpose is not settled.

The reason is documentary. A percentage of a defined denominator is computed from records the manufacturer already holds: purchase invoices, customs entries, and its own cost build-ups. "Component means an article, material, or supply incorporated directly into an end product." 48 CFR 25.003. Cost of components is, for components the contractor purchases, "the acquisition cost, including transportation costs to the place of incorporation into the end product or construction material (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)," and, for components the contractor manufactures, "all costs associated with the manufacture of the component ... plus allocable overhead costs, but excluding profit." Id. The same section closes the fraction at the end product. "Cost of components does not include any costs associated with the manufacture of the end product." Id. That regulation defines neither "manufactured" nor "manufactured in the United States," which is why the site element is stated separately.

The effect is convergence. A grid-connected inverter within the order's "bulk-power system," a term § 5(a) defines to include "transmission lines rated at 69,000 volts (69 kV) or more" and to exclude "facilities used in the local distribution of electric energy," would face one origin test at two agencies, and one evidence file would answer both. Today a grid-connected inverter within both scopes can be foreign-produced under DA 26-870's definition and, on the face of § 5(c), not foreign-produced because it was assembled in the United States. That definition states a countable share and § 5(c) states none. Neither result follows from the other, and an origin conclusion reached under one should not be carried to the other. The Department's answer to (A-5) decides whether the two can be answered from one file.

Two alternatives are feasible and less good. A site-only test is administrable but reaches nothing inside the unit, and it is the arrangement segmentation and relabeling are built to satisfy. A share set without a stated denominator is not computable, because the same ratio can be built from different cost bases. The recommendation above is the pairing that is both computable and anchored.

### Treatments requested by (A-5)(a)

(A-5)(a) asks how the Department should treat "final assembly, substantial transformation, domestic content, contract manufacturing, original design manufacturing, white-labeling, refurbishment, remanufacturing, repair, and incorporation of foreign critical components." 91 FR at 57325. The treatments follow from the two elements above.

1. Final assembly. Necessary and not sufficient. It locates the end product at an identified site, which is what the first element asks, and it carries no weight in the ratio, because 48 CFR 25.003 places the cost of manufacturing the end product outside the fraction. The second element is what keeps the first from resting on assembly alone. A domestic side resting on final assembly alone is what segmentation and relabeling are arranged to reach.

2. Substantial transformation. A customs concept used to determine an article's country of origin. It resolves to a judgment about the article rather than a count from records, and the Department should not adopt it as the test under § 5(c). A CBP origin ruling remains useful evidence of the operations a party represented were performed and where.

3. Domestic content. The cost test above, with end-product assembly, integration, design, and testing outside the fraction.

4. Contract manufacturing, original design manufacturing, and white-labeling. The place test runs on where the operations were performed, whoever performed them. The identity of the entity that performed each major stage is a separate fact and should be disclosed as such. (A-5)(b) asks about persons "owned by, controlled by, or subject to the jurisdiction or direction of a Covered Foreign Entity," 91 FR at 57325, which is a question about entities. § 5(c) is a question about place. In its own regime the Federal Communications Commission construes a different entity question, whether a device is "produced by" a listed entity, under "a totality-of-the-circumstances test that looks to substantial responsibility for or control over a device's design, development, manufacture, or assembly." FCC 26-50, Third Report and Order, 91 FR 57798 (Sept. 11, 2026). That approach is noted only to show that an entity inquiry can be stated without a bright line. No conclusion under one regime should be carried to the other.

5. Refurbishment, remanufacturing, and repair. Judged on the operations actually performed and on their component cost. Repair does not change an article's origin.

6. Incorporation of foreign critical components. The cost definition prices a component at one level and does not decompose it into its own inputs, which keeps the ratio countable from the manufacturer's records. What sits inside a domestic component is an entity question, answered by a named-entity screen run alongside the place test rather than folded into it.

III. Question (A-5)(c): The Records That Substantiate Country of Manufacture

(A-5)(c) asks "[w]hat records can manufacturers, importers, distributors, and purchasers reasonably provide to substantiate country of manufacture, production, or assembly?" 91 FR at 57325. The records below are offered as substance, with the minimum each should state:

1. A costed bill of materials per model. One line per part, naming the component manufacturer and not the distributor, the country of origin with multi-country lines split rather than merged, the supply channel as direct, distributor, or broker, the identifier of the supplier declaration on file, and the date origin was last confirmed.

2. A concentration summary per model. Percentage of total bill-of-materials value by country of origin, stating the valuation basis, the twelve-month period used, and the date computed.

3. Supplier origin declarations executed one tier up. The declaring supplier and its country, the part numbers covered, the production site or sites by name, city, and country, the site operator where it differs from the declarant, a contact for verification, an undertaking to give written notice within thirty days of any change of production site, and a signature with name, title, and date.

4. A stated maximum age for age-sensitive records. The published example uses twelve months for supplier declarations on deep-traced lines and for site attestations, and twenty-four months for photographic and production-flow evidence. Attachment A, Gatewell Protocol for Origin Evidence v1.0 rev. 3, § 4.7.3 (Sept. 17, 2026).

5. Site evidence for the end-product manufacturing location. Production-flow records, dated photographs, and a site attestation.

6. Purchase invoices and customs entries for imported components.

7. A calculation memorandum tying the ratio to the bill of materials, stating the denominator, the lines treated as domestic, and the valuation basis.

8. A gap record for any line whose origin could not be determined, holding the inquiry made and the response or its absence. An undetermined line is reported as undetermined and is not counted as domestic.

9. An officer attestation, signed by an officer of the manufacturer, covering the file as of its revision date.

Confirmation method. A supplier statement can be confirmed against its source without anyone deciding whether the underlying origin conclusion is right. The reviewer, not the manufacturer, selects which declarations are confirmed. The reviewer obtains or corroborates the declarant's contact details independently of the manufacturer. The reviewer records what was confirmed and with whom. The published standard states one such rule, under which the reviewer confirms directly with the declaring suppliers "not fewer than three Annex C declarations or ten percent of the declarations on file, whichever is greater, selected by the verifier and including at least one broker-channel line where any exists," with contact details "obtained or corroborated independently of the manufacturer." Attachment A, Gatewell Protocol for Origin Evidence v1.0 rev. 3, Part V (Sept. 17, 2026).

The schema for the bill of materials and the concentration summary is published as a JSON Schema and CSV template "dedicated to the public domain under CC0 1.0," and the standard's text is published under Creative Commons Attribution 4.0. Attachment A, Gatewell Protocol for Origin Evidence v1.0 rev. 3, Annex B (Sept. 17, 2026). Gatewell asks for no adoption, reference, or endorsement. The confirmation step above can be performed by the manufacturer's own internal audit function, by a purchaser conducting diligence, or by the Department, and nothing in it requires a designated reviewer.

IV. Question (A-2): Grid-Connected Inverters

(A-2) asks "[w]hat objective characteristics should DOE consider for utility-scale and other grid-connected inverters" among other categories. 91 FR at 57324. Objective characteristics for this category were stated in DA 26-870 in August 2026, and Gatewell recommends them rather than thresholds of its own. That definition has two limbs. The device "[c]hanges dc power to ac power, to include bidirectional devices, that is intended for use in parallel with an electric utility to supply common loads and sometimes deliver power to the utility, i.e., a utility-interactive inverter as that term is defined in UL 1741 sections 2.1.23, 2.1.52," and it "[c]ontains, or is designed, equipped, or configured to accept, a component that enables remote communication, control, sensing, data-collection, or monitoring through Ethernet, Wi-Fi, cellular, Bluetooth, or other similar connections, whether wired or wireless." DA 26-870 (PSHSB rel. Aug. 20, 2026).

Both limbs are answerable from documents. The utility-interactive limb refers to published sections of UL 1741, which a manufacturer's type-testing records address directly. The connectivity limb reaches a unit "designed, equipped, or configured to accept" a remote-communication component. Where the component is fitted it appears in the bill of materials. Where it is not, the capability is recorded in the schematic, the interface specification, and the product documentation. Gatewell recommends that the Department use these characteristics within the "bulk-power system" as § 5(a) defines it, transmission at 69 kV or more and not local distribution, so the category boundary reads the same at both agencies even where the two origin tests differ. Gatewell proposes no voltage, capacity, or criticality threshold of its own.

V. Question (A-6): Safeguards Against Segmentation, Relabeling, and De Minimis Arrangements

(A-6) asks respondents to "[d]escribe safeguards needed to prevent evasion through segmentation, relabeling, or de minimis arrangements." 91 FR at 57325. The safeguard is the cost-weighted test itself, held to invoice-level records and a named site. Kit assembly does not reach a share set at these levels, because the cost of manufacturing the end product sits outside the fraction under 48 CFR 25.003 while the imported kit sits inside it at acquisition cost. Relabeling does not survive a supplier declaration that names the production site by name, city, and country and the site operator where it differs from the declarant, confirmed with that declarant on contact details corroborated independently of the manufacturer. Segmentation does not change what these records show, because the bill of materials names the component manufacturer rather than the distributor and records the supply channel, so the producing site is named no matter which related entity invoices the line. Whether those entities are themselves of concern is the separate entity question. De minimis aggregation should be permitted for passive commodity classes below a stated threshold and not otherwise. The published schema takes a related approach, permitting passive components to "be aggregated by commodity class with a single coo entry per class where no Annex D match exists." Attachment A, Gatewell Protocol for Origin Evidence v1.0 rev. 3, Annex B.1 (Sept. 17, 2026). A threshold stated by the Department would serve the same purpose.

VI. Conclusion

Gatewell asks the Department to do three things in the rules it publishes under § 3(b) of the order:

1. Define the domestic side of "foreign-produced" in § 5(c) by a countable test: manufacture of the end product in the United States at an identified site, and domestic components exceeding a stated share of the cost of components as defined at 48 CFR 25.003.

2. Align with DA 26-870 (PSHSB rel. Aug. 20, 2026) for grid-connected inverters: 65 percent of total component cost for items delivered through calendar year 2028 and 75 percent for items delivered from calendar year 2029, the levels and the transition year stated in DA 26-870, § 45X eligibility as the stated alternative, and that order's objective characteristics for the category within the "bulk-power system" as § 5(a) defines it.

3. State the documentary content that substantiates country of manufacture, production, or assembly, and a confirmation method under which the reviewer selects the declarations to be confirmed and corroborates the declarant's contact details independently of the manufacturer.

Each is a definitional or documentary statement of the kind § 3(b) contemplates, and none depends on facts outside a manufacturer's own records.