[Federal Register: December 27, 1999 (Volume 64, Number 247)]
[Rules and Regulations]
[Page 72416-72441]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de99-24]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 2, 5, 6, 9, 12, 13, 14, 15, 17, 19, 25, 36, and 52
[FAC 97-15; FAR Case 97-024; Item II]
RIN 9000-AH30
Federal Acquisition Regulation; Foreign Acquisition (Part 25
Rewrite)
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to clarify policies
and procedures concerning foreign acquisition and to rewrite Part 25 in
plain language.
DATES: Effective Date: February 25, 2000.
Applicability Date: The FAR, as amended by this rule, is applicable
to solicitations issued on or after February 25, 2000.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Mr. Paul Linfield, Procurement Analyst, at (202) 501-
1757. Please cite FAC 97-15, FAR case 97-024.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends FAR Parts 1, 2, 5, 6, 9, 12, 13, 14, 15, 17,
19, 25, 36, and 52 to clarify policies and procedures concerning
foreign acquisition and to rewrite Part 25 in plain language. DoD, GSA,
and NASA published a proposed rule in the Federal Register on September
28, 1998 (63 FR 51642). Seven respondents submitted comments. The
Councils considered all comments in formulation of the final rule. This
final rule differs from the proposed rule as follows:
<bullet> Deletes the definitions ``components'' and
``construction'' (25.003), defines construction in 2.101, and
substitutes the definition of ``component'' (2.101) in 52.225-1 and
52.225-3.
<bullet> Deletes the definition ``end product'' (25.003), defines
``end product'' (2.101), and substitutes the definition ``end product''
in 2.101 in the clauses at 52.225-1, 52.225-3, and 52.225-5.
<bullet> Revises the definition ``U.S.-made end product'' to
include unmanufactured articles mined or produced in the United States
(25.003).
<bullet> Deletes the requirement in some circumstances for a
written determination of domestic nonavailability (25.103).
<bullet> Clarifies the procedures for preaward determinations of
inapplicability of the Buy American Act for construction contracts
(25.203).
<bullet> Clarifies the application of the Trade Agreements Act in
acquisitions with limitations on the use of full and open competition
in accordance with Part 6 or 13 (6.303-1, 25.401, and 25.408).
<bullet> Addresses excluded services under the Trade Agreements Act
as well as NAFTA (25.401).
<bullet> Clarifies that the procedures at 25.502(c) apply only if
the Buy American Act or Balance of Payments Program apply.
[[Page 72417]]
<bullet> Revises the examples at 25.504-1 to clarify how the Buy
American Act and the Balance of Payments Programs apply to small
business set-asides.
<bullet> Adds an alternate to the clause at 52.212-5, Contract
Terms and Conditions Required to Implement Statute or Executive
Orders--Commercial Items, to provide for waiver of the examination of
records (12.301(b), 25.1001, and 52.212-5).
<bullet> Adds a definition of ``United States'' to the clauses at
52.225-1, 52.225-3, 52.225-5, 52.225-9, and 52.225-11.
<bullet> Adds a definition of ``Customs territory of the United
States'' to the clause at 52.225-8, Duty-Free Entry.
<bullet> Clarifies application of the Balance of Payments Program
(25.504-1(b), 25.1101(b)(1)(i)(A), and 25.1101(c)(1)).
The restructuring of Part 25 in the proposed rule has been
maintained in the final rule. The following list summarizes the
renumbering of the clauses at 52.225, which has not changed from the
proposed rule:
------------------------------------------------------------------------
Current FAR Section New FAR Section
------------------------------------------------------------------------
52.225-1 and -6........................... 52.225-2
52.225-2.................................. 52.225-7
52.225-3 and -7........................... 52.225-1
52.225-4.................................. 52.225-17
52.225-5.................................. 52.225-9
52.225-8.................................. 52.225-6
52.225-9.................................. 52.225-5
52.225-10................................. 52.225-8
52.225-11................................. 52.225-13
52.225-12................................. 52.225-10
52.225-13................................. 52.225-12
52.225-14................................. 52.225-14
52.225-15 and -22......................... 52.225-11
52.225-18................................. 52.225-15
52.225-19................................. 52.225-16
52.225-20................................. 52.225-4
52.225-21................................. 52.225-3
------------------------------------------------------------------------
This rule was not subject to Office of Management and Budget review
under Section 6(b) of Executive Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This rule is not a major rule under 5
U.S.C. 804.
B. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because it primarily clarifies
existing guidance pertaining to acquisition of foreign supplies,
services, and construction.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) applies because the
final rule contains information collection requirements. The Office of
Management and Budget has approved the information collection
requirements associated with Part 25 under OMB Control Numbers 9000-
0022, 9000-0023, 9000-0024, 9000-0025, 9000-0130, and 9000-0141. The
applicable changes to the clause numbers of the provisions and clauses
that are covered by these approvals are addressed in the preamble to
the proposed rule (63 FR 51642).
List of Subjects in 48 CFR Parts 1, 2, 5, 6, 9, 12, 13, 14, 15, 17,
19, 25, 36, and 52:
Government procurement.
Dated: December 20, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 2, 5, 6, 9, 12,
13, 14, 15, 17, 19, 25, 36, and 52 as set forth below:
1. The authority citation for 48 CFR parts 1, 2, 5, 6, 9, 12, 13,
14, 15, 17, 19, 25, 36, and 52 continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
2. Amend section 1.106 in the table following the introductory
paragraph by removing the FAR Segment and OMB Control Number in the
left columns and adding the FAR Segment and OMB Control Number listed
in the right columns as follows:
----------------------------------------------------------------------------------------------------------------
Remove Add
----------------------------------------------------------------------------------------------------------------
Far segment OMB Control No. FAR segment OMB Control No.
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52.225-1............................. 9000-0024.............. 52.225-2............... 9000-0023 and 9000-0024
52.225-6............................. 9000-0023.............. 52.225-4............... 9000-0130
52.225-8............................. 9000-0025.............. 52.225-6............... 9000-0025
52.225-10............................ 9000-0022.............. 52.225-8............... 9000-0022
52.225-20............................ 9000-0130.............. 52.225-9............... 9000-0141
52.225-11.............. 9000-0141
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PART 2--DEFINITIONS OF WORDS AND TERMS
3. Amend section 2.101 by revising the definitions ``Component''
and ``United States'', and by adding, in alphabetical order, the
definitions ``Construction'' and ``End product'' to read as follows:
2.101 Definitions.
* * * * *
Component means any item supplied to the Government as part of an
end item or of another component, except that for use in 52.225-9 and
52.225-11, see the definitions in 52.225-9(a) and 52.225-11(a).
Construction means construction, alteration, or repair (including
dredging, excavating, and painting) of buildings, structures, or other
real property. For purposes of this definition, the terms ``buildings,
structures, or other real property'' include, but are not limited to,
improvements of all types, such as bridges, dams, plants, highways,
parkways, streets, subways, tunnels, sewers, mains, power lines,
cemeteries, pumping stations, railways, airport facilities, terminals,
docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters,
levees, canals, and channels. Construction does not include the
manufacture, production, furnishing, construction, alteration, repair,
processing, or assembling of vessels, aircraft, or other kinds of
personal property.
* * * * *
End product means supplies delivered under a line item of a
Government contract.
* * * * *
United States, when used in a geographic sense, means the 50 States
and the District of Columbia, except as follows:
(1) For use in Subpart 22.8, see the definition at 22.801.
(2) For use in Subpart 22.10, see the definition at 22.1001.
(3) For use in Part 25, see the definition at 25.003.
[[Page 72418]]
(4) For use in Subpart 47.4, see the definition at 47.401.
PART 5--PUBLICIZING CONTRACT ACTIONS
4. Amend section 5.301 by revising paragraph (a); and in paragraph
(c) by removing ``shall'' and adding ``must'' in its place. The revised
text reads as follows:
5.301 General.
(a) Except for contract actions described in paragraph (b) of this
section, contracting officers must synopsize in the Commerce Business
Daily (CBD) awards exceeding $25,000 that are--
(1) Subject to the Trade Agreements Act (see Subpart 25.4); or
(2) Likely to result in the award of any subcontracts. However, the
dollar threshold is not a prohibition against publicizing an award of a
smaller amount when publicizing would be advantageous to industry or to
the Government.
* * * * *
PART 6--COMPETITION REQUIREMENTS
5. Revise paragraph (d) of section 6.303-1 to read as follows:
6.303-1 Requirements.
* * * * *
(d) If the authority of 6.302-3(a)(2)(i) or 6.302-7 is being cited
as a basis for not providing for full and open competition in an
acquisition that would otherwise be subject to the Trade Agreements Act
(see Subpart 25.4), the contracting officer must forward a copy of the
justification, in accordance with agency procedures, to the agencys
point of contact with the Office of the United States Trade
Representative.
* * * * *
PART 9--CONTRACTOR QUALIFICATIONS
6. Revise paragraph (b) of section 9.205 to read as follows:
9.205 Opportunity for qualification before award.
* * * * *
(b) The activity responsible for establishing a qualification
requirement must keep any list maintained of those already qualified
open for inclusion of additional products, manufacturers, or other
potential sources, including eligible products from designated
countries under the terms of the Trade Agreements Act (see Subpart
25.4).
PART 12--ACQUISITION OF COMMERCIAL ITEMS
7. Revise paragraph (c) of section 12.205 to read as follows:
12.205 Offers.
* * * * *
(c) Consistent with the requirements at 5.203(b), the contracting
officer may allow fewer than 30 days response time for receipt of
offers for commercial items, unless the acquisition is subject to NAFTA
or the Trade Agreements Act (see 5.203(h)).
8. Amend section 12.301 by adding a sentence to the end of
paragraph (b)(4) to read as follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(b) * * *
(4) * * * Use the clause with its Alternate I when the head of the
agency has waived the examination of records by the Comptroller General
in accordance with 25.1001.
* * * * *
12.504 [Amended]
9. Amend section 12.504 by removing paragraphs (a)(2) through
(a)(4) and redesignating (a)(5) through (a)(15) as (a)(2) through
(a)(12), respectively.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
13.101 [Amended]
10. Amend section 13.101 at the end of paragraph (a)(2) by adding
the word ``and''; by removing paragraph (a)(3); and by redesignating
paragraph (a)(4) as (a)(3).
11. Revise paragraph (d) of section 13.302-5 to read as follows:
13.302-5 Clauses.
* * * * *
(d)(1) The contracting officer may use the clause at 52.213-4,
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Items), in simplified acquisitions exceeding the micro-purchase
threshold that are for other than commercial items (see 12.301).
(2) The clause--
(i) Is a compilation of the most commonly used clauses that apply
to simplified acquisitions; and
(ii) May be modified to fit the individual acquisition to add other
needed clauses, or those clauses may be added separately. Modifications
(i.e., additions, deletions, or substitutions) must not create a void
or internal contradiction in the clause. For example, do not add an
inspection and acceptance or termination for convenience requirement
unless the existing requirement is deleted. Also, do not delete a
paragraph without providing for an appropriate substitute.
(3)(i) When an acquisition for supplies for use within the United
States cannot be set aside for small business concerns and trade
agreements apply (see Subpart 25.4), substitute the clause at FAR
52.225-3, Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program, used with Alternate I
or Alternate II, if appropriate, instead of the clause at FAR 52.225-1,
Buy American Act--Balance of Payments Program--Supplies.
(ii) When acquiring supplies for use outside the United States,
delete clause 52.225-1 from the clause list at 52.213-4(b).
PART 14--SEALED BIDDING
12. Revise paragraphs (w) and (x) of section 14.201-6 to read as
follows:
14.201-6 Solicitation provisions.
* * * * *
(w) Insert the provision at 52.214-34, Submission of Offers in the
English Language, in solicitations that include any of the clauses
prescribed in 25.1101 or 25.1102. It may be included in other
solicitations when the contracting officer decides that it is
necessary.
(x) Insert the provision at 52.214-35, Submission of Offers in U.S.
Currency, in solicitations that include any of the clauses prescribed
in 25.1101 or 25.1102, unless the contracting officer includes the
clause at 52.225-17, Evaluation of Foreign Currency Offers, as
prescribed in 25.1103(d). It may be included in other solicitations
when the contracting officer decides that it is necessary.
14.409-1 [Amended]
13. Amend section 14.409-1 in the introductory text of paragraph
(a)(2) by removing ``(see 25.405(e))'' and adding ``(see
25.408(a)(4))'' in its place; and by removing ``shall'' and adding
``must'' in its place.
PART 15--CONTRACTING BY NEGOTIATION
14. Revise paragraph (b)(4) of section 15.209 to read as follows:
15.209 Solicitation provisions and contract clauses.
* * * * *
(b) * * *
(4) When the head of the agency has waived the examination of
records by
[[Page 72419]]
the Comptroller General in accordance with 25.1001, use the clause with
its Alternate III.
* * * * *
PART 17--SPECIAL CONTRACTING METHODS
15. Revise paragraph (h) of section 17.203 to read as follows:
17.203 Solicitations.
* * * * *
(h) Include the value of options in determining if the acquisition
will exceed the Trade Agreements Act and North American Free Trade
Agreement thresholds.
PART 19--SMALL BUSINESS PROGRAMS
19.1103 [Amended]
15a. In paragraph (a)(2) of section 19.1103, remove ``25.402'' and
add ``25.403'' in its place.
19.1307 [Amended]
15b. In paragraph (b)(3) of section 19.1307, remove ``25.402'' and
add ``25.403'' in its place.
16. Revise Part 25 to read as follows:
PART 25--FOREIGN ACQUISITION
Sec.
25.000 Scope of part.
25.001 General.
25.002 Applicability of subparts.
25.003 Definitions.
Subpart 25.1--Buy American Act--Supplies
25.100 Scope of subpart.
25.101 General.
25.102 Policy.
25.103 Exceptions.
25.104 Nonavailable articles.
25.105 Determining reasonableness of cost.
Subpart 25.2--Buy American Act--Construction Materials
25.200 Scope of subpart.
25.201 Policy.
25.202 Exceptions.
25.203 Preaward determinations.
25.204 Evaluating offers of foreign construction material.
25.205 Postaward determinations.
25.206 Noncompliance.
Subpart 25.3--Balance of Payments Program
25.300 Scope of subpart.
25.301 General.
25.302 Policy.
25.303 Exceptions.
25.304 Procedures.
Subpart 25.4--Trade Agreements
25.400 Scope of subpart.
25.401 Exceptions.
25.402 General.
25.403 Trade Agreements Act.
25.404 Caribbean Basin Trade Initiative.
25.405 North American Free Trade Agreement (NAFTA).
25.406 Israeli Trade Act.
25.407 Agreement on Trade in Civil Aircraft.
25.408 Procedures.
Subpart 25.5--Evaluating Foreign Offers--Supply Contracts
25.501 General.
25.502 Application.
25.503 Group offers.
25.504 Evaluation examples.
25.504-1 Buy American Act/Balance of Payments Program.
25.504-2 Trade Agreements Act/Caribbean Basin Trade Initiative/
NAFTA.
25.504-3 NAFTA/Israeli Trade Act.
25.504-4 Group award basis.
Subpart 25.6--Trade Sanctions
25.600 Scope of subpart.
25.601 Policy.
25.602 Exceptions.
Subpart 25.7--Prohibited Sources
25.701 Restrictions.
25.702 Source of further information.
Subpart 25.8--Other International Agreements and Coordination
25.801 General.
25.802 Procedures.
Subpart 25.9--Customs and Duties
25.900 Scope of subpart.
25.901 Policy.
25.902 Procedures.
25.903 Exempted supplies.
Subpart 25.10--Additional Foreign Acquisition Regulations.
25.1001 Waiver of right to examination of records.
25.1002 Use of foreign currency.
Subpart 25.11--Solicitation Provisions and Contract Clauses.
25.1101 Acquisition of supplies.
25.1102 Acquisition of construction.
25.1103 Other provisions and clauses.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
25.000 Scope of part.
This part provides policies and procedures for acquiring foreign
supplies, services, and construction materials. It implements the Buy
American Act, the Balance of Payments Program, trade agreements, and
other laws and regulations.
25.001 General.
(a) The Buy American Act--
(1) Restricts the purchase of supplies, that are not domestic end
products, for use within the United States. A foreign end product may
be purchased if the contracting officer determines that the price of
the lowest domestic offer is unreasonable or if another exception
applies (see Subpart 25.1); and
(2) Requires, with some exceptions, the use of only domestic
construction materials in contracts for construction in the United
States (see Subpart 25.2).
(b) The Balance of Payments Program (see Subpart 25.3) is similar
to the Buy American Act in its implementation, except that it applies
to the purchase of supplies for use outside the United States and
construction materials for construction contracts performed outside the
United States.
(c) The restrictions in the Buy American Act and the Balance of
Payments Program are not applicable in acquisitions subject to certain
trade agreements (see Subpart 25.4). In these acquisitions, end
products and construction materials from certain countries receive
nondiscriminatory treatment in evaluation with domestic offers.
Generally, the dollar value of the acquisition determines which of the
trade agreements applies. Exceptions to the applicability of the trade
agreements are described in Subpart 25.4.
(d) The test to determine the country of origin for an end product
under the trade agreements is different from the test to determine the
country of origin for an end product under the Buy American Act (see
the various country ``end product'' definitions in 25.003). The Buy
American Act uses a two-part test to define a ``domestic end product''
(manufacture in the United States and a formula based on cost of
domestic components). Under the trade agreements, the test to determine
country of origin is ``substantial transformation'' (i.e., transforming
an article into a new and different article of commerce, with a name,
character, or use distinct from the original article).
(e) On April 22, 1992, the President made a determination under
section 305 of the Trade Agreements Act to impose sanctions against
some European Union countries for discriminating against U.S. products
and services (see Subpart 25.6).
25.002 Applicability of subparts.
The following table shows the applicability of the subparts.
Subpart 25.5 provides comprehensive procedures for offer evaluation and
examples.
[[Page 72420]]
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Supplies for use Construction Services
------------------------------------ performed
Subpart -----------------
Inside Outside Inside Outside Inside Outside
U.S. U.S. U.S. U.S. U.S. U.S.
----------------------------------------------------------------------------------------------------------------
25.1 ................. Buy American Act--Supplies........ X ....... ....... ....... ....... .......
25.2 ................. Buy American Act--Construction ....... ....... X ....... ....... .......
Materials.
25.3 ................. Balance of Payments Program....... ....... X ....... X ....... .......
25.4 ................. Trade Agreements.................. X X X X X X
25.5 ................. Evaluating Foreign Offers--Supply X X ....... ....... ....... .......
Contracts.
25.6 ................. Trade Sanctions................... X X X X X X
25.7 ................. Prohibited Sources................ X X X X X X
25.8 ................. Other International Agreements and X X ....... X ....... X
Coordination.
25.9 ................. Customs and Duties................ X ....... ....... ....... ....... .......
25.10................. Additional Foreign Acquisition X X X X X X
Regulations.
25.11................. Solicitation Provisions and X X X X X X
Contract Clauses.
----------------------------------------------------------------------------------------------------------------
25.003 Definitions.
As used in this part--
Canadian end product means an article that--
(1) Is wholly the growth, product, or manufacture of Canada; or
(2) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in
Canada into a new and different article of commerce with a name,
character, or use distinct from that of the article or articles from
which it was transformed. The term refers to a product offered for
purchase under a supply contract, but for purposes of calculating the
value of the end product includes services (except transportation
services) incidental to the article, provided that the value of those
incidental services does not exceed that of the article itself.
Caribbean Basin country means any of the following countries:
Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin
Islands, Costa Rica, Dominica, Dominican Republic, El Salvador,
Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Montserrat,
Netherlands Antilles, Nicaragua, Panama, St. Kitts and Nevis, St.
Lucia, St. Vincent and the Grenadines, Tobago and Trinidad.
Caribbean Basin country end product means an article that--
(1) Is wholly the growth, product, or manufacture of a Caribbean
Basin country; or
(2) In the case of an article 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 article of commerce
with a name, character, or use distinct from that of the article or
articles from which it was transformed. The term refers to a product
offered for purchase under a supply contract, but for purposes of
calculating the value of the end product includes services (except
transportation services) incidental to the article, provided that the
value of those incidental services does not exceed that of the article
itself. The term excludes products that are excluded from duty-free
treatment for Caribbean countries under 19 U.S.C. 2703(b), which
presently are--
(i) Textiles and apparel articles that are subject to textile
agreements;
(ii) Footwear, handbags, luggage, flat goods, work gloves, and
leather wearing apparel not designated as eligible articles for the
purpose of the Generalized System of Preferences under Title V of the
Trade Act of 1974;
(iii) Tuna, prepared or preserved in any manner in airtight
containers;
(iv) Petroleum, or any product derived from petroleum; and
(v) Watches and watch parts (including cases, bracelets, and
straps) of whatever type including, but not limited to, mechanical,
quartz digital, or quartz analog, if such watches or watch parts
contain any material that is the product of any country to which the
Harmonized Tariff Schedule of the United States (HTSUS) column 2 rates
of duty apply.
Civil aircraft and related articles means--
(1) All aircraft other than aircraft to be purchased for use by the
Department of Defense or the U.S. Coast Guard;
(2) The engines (and parts and components for incorporation into
the engines) of these aircraft;
(3) Any other parts, components, and subassemblies for
incorporation into the aircraft; and
(4) Any ground flight simulators, and parts and components of these
simulators, for use with respect to the aircraft, whether to be used as
original or replacement equipment in the manufacture, repair,
maintenance, rebuilding, modification, or conversion of the aircraft
and without regard to whether the aircraft or articles receive duty-
free treatment under section 601(a)(2) of the Trade Agreements Act.
Construction material means an article, material, or supply brought
to the construction site by a contractor or 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--
(1) 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
(2) 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 end
product.
Customs territory of the United States means the States, the
District of Columbia, and Puerto Rico.
Designated country means any of the following countries:
Aruba, Austria, Bangladesh, Belgium, Benin, Bhutan, Botswana,
Burkina Faso,
[[Page 72421]]
Burundi, Canada, Cape Verde, Central African Republic, Chad, Comoros,
Denmark, Djibouti, Equatorial Guinea, Finland, France, Gambia, Germany,
Greece, Guinea, Guinea-Bissau, Haiti, Hong Kong, Ireland, Israel,
Italy, Japan, Kiribati, Korea, Republic of Lesotho, Liechtenstein,
Luxembourg, Malawi, Maldives, Mali, Mozambique, Nepal, Netherlands,
Niger, Norway, Portugal, Rwanda, Sao Tome and Principe, Sierra Leone,
Singapore, Somalia, Spain, Sweden, Switzerland, Tanzania U.R., Togo,
Tuvalu, Uganda, United Kingdom, Vanuatu, Western Samoa, Yemen
Designated country end product means an article that--
(1) Is wholly the growth, product, or manufacture of a designated
country; or
(2) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in a
designated country into a new and different article of commerce with a
name, character, or use distinct from that of the article or articles
from which it was transformed. The term refers to a product offered for
purchase under a supply contract, but for purposes of calculating the
value of the end product includes services (except transportation
services) incidental to the article, provided that the value of those
incidental services does not exceed that of the article itself.
Domestic construction material means--
(1) An unmanufactured construction material mined or produced in
the United States; or
(2) A construction material manufactured in the United States, if
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.
Domestic end product means--
(1) An unmanufactured end product mined or produced in the United
States; or
(2) An end product manufactured in the United States, if 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 as those that the agency
determines are not mined, produced, or manufactured in sufficient and
reasonably available commercial quantities of a satisfactory quality
are treated as domestic. Scrap generated, collected, and prepared for
processing in the United States is considered domestic.
Domestic offer means an offer of a domestic end product. When the
solicitation specifies that award will be made on a group of line
items, a domestic offer means an offer where the proposed price of the
domestic end products exceeds 50 percent of the total proposed price of
the group.
Eligible offer means an offer of an eligible product. When the
solicitation specifies that award will be made on a group of line
items, an eligible offer means a foreign offer where the combined
proposed price of the eligible products and the domestic end products
exceeds 50 percent of the total proposed price of the group.
Eligible product means a foreign end product that is not subject to
discriminatory treatment under either the Buy American Act or the
Balance of Payments Program, due to applicability of a trade agreement
to a particular acquisition.
Foreign construction material means a construction material other
than a domestic construction material.
Foreign contractor means a contractor or subcontractor organized or
existing under the laws of a country other than the United States.
Foreign end product means an end product other than a domestic end
product.
Foreign offer means any offer other than a domestic offer.
Israeli end product means an article that--
(1) Is wholly the growth, product, or manufacture of Israel; or
(2) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in
Israel into a new and different article of commerce with a name,
character, or use distinct from that of the article or articles from
which it was transformed.
Mexican end product means an article that--
(1) Is wholly the growth, product, or manufacture of Mexico; or
(2) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in
Mexico into a new and different article of commerce with a name,
character, or use distinct from that of the article or articles from
which it was transformed. The term refers to a product offered for
purchase under a supply contract, but for purposes of calculating the
value of the end product includes services (except transportation
services) incidental to the article, provided that the value of those
incidental services does not exceed that of the article itself.
Noneligible offer means an offer of a noneligible product.
Noneligible product means a foreign end product that is not an
eligible product.
North American Free Trade Agreement country means Canada or Mexico.
North American Free Trade Agreement country end product means an
article that--
(1) Is wholly the growth, product, or manufacture of a North
American Free Trade Agreement (NAFTA) country; or
(2) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in a
NAFTA country into a new and different article of commerce with a name,
character, or use distinct from that of the article or articles from
which it was transformed. The term refers to a product offered for
purchase under a supply contract, but for purposes of calculating the
value of the end product includes services (except transportation
services) incidental to the article, provided that the value of those
incidental services does not exceed that of the article itself.
Sanctioned European Union country construction means construction
to be performed in a sanctioned European Union member state.
Sanctioned European Union country end product means an article
that--
(1) Is wholly the growth, product, or manufacture of a sanctioned
European Union (EU) member state; or
(2) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in a
sanctioned EU member state into a new and different article of commerce
with a name, character, or use distinct from that of the article or
articles from which it was transformed. The term refers to a product
offered for purchase under a supply contract, but for purposes of
calculating the value of the end product includes services (except
transportation services) incidental to the article, provided that the
value of these incidental services does not exceed that of the article
itself.
Sanctioned European Union country services means services to be
performed in a sanctioned European Union member state.
Sanctioned European Union member state means Austria, Belgium,
Denmark, Finland, France, Ireland, Italy, Luxembourg, the Netherlands,
Sweden, or the United Kingdom.
United States means the 50 States and the District of Columbia,
U.S. territories
[[Page 72422]]
and possessions, Puerto Rico, the Northern Mariana Islands, and any
other place subject to U.S. jurisdiction, but does not include leased
bases.
U.S.-made end product means an article that is mined, produced, or
manufactured in the United States or that is substantially transformed
in the United States into a new and different article of commerce with
a name, character, or use distinct from that of the article or articles
from which it was transformed.
Subpart 25.1--Buy American Act--Supplies
25.100 Scope of subpart.
This subpart implements the Buy American Act (41 U.S.C. 10a-10d)
and Executive Order 10582, December 17, 1954. It applies to supplies
acquired for use in the United States,
(b) The supply portion of a contract for services that involves the
furnishing of supplies (e.g., lease) exceeds the micro-purchase
threshold.
25.101 General.
(a) The Buy American Act restricts the purchase of supplies that
are not domestic end products. For manufactured end products, the Buy
American Act uses a two-part test to define a domestic end product.
(1) The article must be manufactured in the United States; and
(2) The cost of domestic components must exceed 50 percent of the
cost of all the components.
(b) The Buy American Act applies to small business set-asides. A
manufactured product of a small business concern is a U.S.-made end
product, but is not a domestic end product unless it meets the
component test in paragraph (a)(2) of this section.
(c) Exceptions that allow the purchase of a foreign end product are
listed at 25.103. The unreasonable cost exception is implemented
through the use of an evaluation factor applied to low foreign offers
that are not eligible offers. The evaluation factor is not used to
provide a preference for one foreign offer over another. Evaluation
procedures and examples are provided in Subpart 25.5.
25.102 Policy.
Except as provided in 25.103, acquire only domestic end products
for public use inside the United States.
25.103 Exceptions.
When one of the following exceptions applies, the contracting
officer may acquire a foreign end product without regard to the
restrictions of the Buy American Act:
(a) Public interest. The head of the agency may make a
determination that domestic preference would be inconsistent with the
public interest. This exception applies when an agency has an agreement
with a foreign government that provides a blanket exception to the Buy
American Act.
(b) Nonavailability. (1) A nonavailability determination has been
made for the articles listed in 25.104.
(2)(i) The head of the contracting activity may make a
determination that an article, material, or supply is not mined,
produced, or manufactured in the United States in sufficient and
reasonably available commercial quantities of a satisfactory quality.
(ii) If the contracting officer considers that the nonavailability
of an article is likely to affect future acquisitions, the contracting
officer may submit a copy of the determination and supporting
documentation to the appropriate council identified in 1.201-1 in
accordance with agency procedures, for possible addition to the list in
25.104.
(3) A written determination is not required if all of the following
conditions are present:
(i) The acquisition was conducted through use of full and open
competition.
(ii) The acquisition was synopsized in accordance with 5.201.
(iii) No offer for a domestic end product was received.
(c) Unreasonable cost. The contracting officer may determine that
the cost of a domestic end product would be unreasonable, in accordance
with 25.105 and Subpart 25.5.
(d) Resale. The contracting officer may purchase foreign end
products specifically for commissary resale.
25.104 Nonavailable articles.
(a) The following articles have been determined to be nonavailable
in accordance with 25.103(b):
Acetylene, black.
Agar, bulk.
Anise.
Antimony, as metal or oxide.
Asbestos, amosite, chrysotile, and crocidolite.
Bananas.
Bauxite.
Beef, corned, canned.
Beef extract.
Bephenium hydroxynapthoate.
Bismuth.
Books, trade, text, technical, or scientific; newspapers; pamphlets;
magazines; periodicals; printed briefs and films; not printed in the
United States and for which domestic editions are not available.
Brazil nuts, unroasted.
Cadmium, ores and flue dust.
Calcium cyanamide.
Capers.
Cashew nuts.
Castor beans and castor oil.
Chalk, English.
Chestnuts.
Chicle.
Chrome ore or chromite.
Cinchona bark.
Cobalt, in cathodes, rondelles, or other primary ore and metal
forms.
Cocoa beans.
Coconut and coconut meat, unsweetened, in shredded, desiccated, or
similarly prepared form.
Coffee, raw or green bean.
Colchicine alkaloid, raw.
Copra.
Cork, wood or bark and waste.
Cover glass, microscope slide.
Crane rail (85-pound per foot).
Cryolite, natural.
Dammar gum.
Diamonds, industrial, stones and abrasives.
Emetine, bulk.
Ergot, crude.
Erythrityl tetranitrate.
Fair linen, altar.
Fibers of the following types: abaca, abace, agave, coir, flax,
jute, jute burlaps, palmyra, and sisal.
Goat and kidskins.
Graphite, natural, crystalline, crucible grade.
Hand file sets (Swiss pattern).
Handsewing needles.
Hemp yarn.
Hog bristles for brushes.
Hyoscine, bulk.
Ipecac, root.
Iodine, crude.
Kaurigum.
Lac.
Leather, sheepskin, hair type.
Lavender oil.
Manganese.
Menthol, natural bulk.
Mica.
Microprocessor chips (brought onto a Government construction site as
separate units for incorporation into building systems during
construction or repair and alteration of real property).
Nickel, primary, in ingots, pigs, shots, cathodes, or similar forms;
nickel oxide and nickel salts.
Nitroguanidine (also known as picrite).
Nux vomica, crude.
Oiticica oil.
Olive oil.
Olives (green), pitted or unpitted, or stuffed, in bulk.
Opium, crude.
Oranges, mandarin, canned.
Petroleum, crude oil, unfinished oils, and finished products.
Pine needle oil.
Platinum and related group metals, refined, as sponge, powder,
ingots, or cast bars.
Pyrethrum flowers.
Quartz crystals.
Quebracho.
Quinidine.
Quinine.
Rabbit fur felt.
Radium salts, source and special nuclear materials.
Rosettes.
[[Page 72423]]
Rubber, crude and latex.
Rutile.
Santonin, crude.
Secretin.
Shellac.
Silk, raw and unmanufactured.
Spare and replacement parts for equipment of foreign manufacture,
and for which domestic parts are not available.
Spices and herbs, in bulk.
Sugars, raw.
Swords and scabbards.
Talc, block, steatite.
Tantalum.
Tapioca flour and cassava.
Tartar, crude; tartaric acid and cream of tartar in bulk.
Tea in bulk.
Thread, metallic (gold).
Thyme oil.
Tin in bars, blocks, and pigs.
Triprolidine hydrochloride.
Tungsten.
Vanilla beans.
Venom, cobra.
Wax, carnauba.
Wire glass.
Woods; logs, veneer, and lumber of the following species: Alaskan
yellow cedar, angelique, balsa, ekki, greenheart, lignum vitae,
mahogany, and teak.
Yarn, 50 Denier rayon.
(b) The determination in paragraph (a) of this section does not
apply if the contracting officer learns before the time designated for
receipt of bids in sealed bidding or final offers in negotiation that
an article on the list is available domestically in sufficient and
reasonably available quantities of a satisfactory quality. The
contracting officer must amend the solicitation if purchasing the
article, or if purchasing an end product that could contain such an
article as a component, and must specify in all new solicitations that
the article is available domestically and that offerors and contractors
may not treat foreign components of the same class or kind as domestic
components. In addition, the contracting officer must submit a copy of
supporting documentation to the appropriate council identified in
1.201-1 in accordance with agency procedures, for possible removal of
the article from the list.
25.105 Determining reasonableness of cost.
(a) The contracting officer--
(1) Must use the evaluation factors in paragraph (b) of this
section unless the head of the agency makes a written determination
that the use of higher factors is more appropriate. If the
determination applies to all agency acquisitions, the agency evaluation
factors must be published in agency regulations; and
(2) Must not apply evaluation factors to offers of eligible
products if the acquisition is subject to a trade agreement under
Subpart 25.4.
(b) If there is a domestic offer that is not the low offer, and the
restrictions of the Buy American Act apply to the low offer, the
contracting officer must determine the reasonableness of the cost of
the domestic offer by adding to the price of the low offer, inclusive
of duty--
(1) 6 percent, if the lowest domestic offer is from a large
business concern; or
(2) 12 percent, if the lowest domestic offer is from a small
business concern. The contracting officer must use this factor, or
another factor established in agency regulations, in small business
set-asides if the low offer is from a small business concern offering
the product of a small business concern that is not a domestic end
product (see Subpart 19.5).
(c) The price of the domestic offer is reasonable if it does not
exceed the evaluated price of the low offer after addition of the
appropriate evaluation factor in accordance with paragraph (a) or (b)
of this section. (See evaluation procedures at Subpart 25.5.)
Subpart 25.2--Buy American Act--Construction Materials
25.200 Scope of subpart.
This subpart implements the Buy American Act (41 U.S.C. 10a-10d)
and Executive Order 10582, December 17, 1954. It applies to contracts
for the construction, alteration, or repair of any public building or
public work in the United States.
25.201 Policy.
Except as provided in 25.202, use only domestic construction
materials in construction contracts performed in the United States.
25.202 Exceptions.
(a) When one of the following exceptions applies, the contracting
officer may acquire foreign construction materials without regard to
the restrictions of the Buy American Act:
(1) Impracticable or inconsistent with public interest. The head of
the agency may determine that application of the restrictions of the
Buy American Act to a particular construction material would be
impracticable or would be inconsistent with the public interest. The
public interest exception applies when an agency has an agreement with
a foreign government that provides a blanket exception to the Buy
American Act.
(2) Nonavailability. The head of the contracting activity may
determine that a particular construction material is not mined,
produced, or manufactured in the United States in sufficient and
reasonably available commercial quantities of a satisfactory quality.
The determinations of nonavailability of the articles listed at
25.104(a) and the procedures at 25.104(b) also apply if any of those
articles are acquired as construction materials.
(3) Unreasonable cost. The contracting officer concludes that the
cost of domestic construction material is unreasonable in accordance
with 25.204.
(b) Determination and findings. When a determination is made for
any of the reasons stated in this section that certain foreign
construction materials may be used, the contracting officer must list
the excepted materials in the contract. The agency must make the
findings justifying the exception available for public inspection.
(c) Acquisitions under trade agreements. For construction contracts
with an estimated acquisition value of $6,909,500 or more, see 25.405.
If the acquisition value is $7,143,000 or more, also see 25.403.
25.203 Preaward determinations.
(a) For any acquisition, an offeror may request from the
contracting officer a determination concerning the inapplicability of
the Buy American Act for specifically identified construction
materials. The time for submitting the request is specified in the
solicitation in paragraph (b) of either 52.225-10 or 52.225-12,
whichever applies. The information and supporting data that must be
included in the request are also specified in the solicitation in
paragraphs (c) and (d) of either 52.225-9 or 52.225-11, whichever
applies.
(b) Before award, the contracting officer must evaluate all
requests based on the information provided and may supplement this
information with other readily available information.
25.204 Evaluating offers of foreign construction material.
(a) Offerors proposing to use foreign construction material other
than that listed by the Government in the applicable clause at 52.225-
9, paragraph (b)(2), or 52.225-11, paragraph (b)(3), or excepted under
the Trade Agreements Act or NAFTA (paragraph (b)(2) of 52.225-11), must
provide the information required by paragraphs (c) and (d) of the
respective clauses.
(b) Unless the head of the agency specifies a higher percentage,
the contracting officer must add to the offered price 6 percent of the
cost of any foreign construction material proposed for exception from
the requirements of
[[Page 72424]]
the Buy American Act based on the unreasonable cost of domestic
construction materials. In the case of a tie, the contracting officer
must give preference to an offer that does not include foreign
construction material excepted at the request of the offeror on the
basis of unreasonable cost.
(c) Offerors also may submit alternate offers based on use of
equivalent domestic construction material to avoid possible rejection
of the entire offer if the Government determines that an exception
permitting use of a particular foreign construction material does not
apply.
(d) If the contracting officer awards a contract to an offeror that
proposed foreign construction material not listed in the applicable
clause in the solicitation (paragraph (b)(2) of 52.225-9, or paragraph
(b)(3) of 52.225-11), the contracting officer must add the excepted
materials to the list in the contract clause.
25.205 Postaward determinations.
(a) If a contractor requests a determination regarding the
inapplicability of the Buy American Act after contract award, the
contractor must explain why it could not request the determination
before contract award or why the need for such determination otherwise
was not reasonably foreseeable. If the contracting officer concludes
that the contractor should have made the request before contract award,
the contracting officer may deny the request.
(b) The contracting officer must base evaluation of any request for
a determination regarding the inapplicability of the Buy American Act
made after contract award on information required by paragraphs (c) and
(d) of the applicable clause at 52.225-9 or 52.225-11 and/or other
readily available information.
(c) If a determination, under 25.202(a), is made after contract
award that an exception to the Buy American Act applies, the
contracting officer must negotiate adequate consideration and modify
the contract to allow use of the foreign construction material. When
the basis for the exception is the unreasonable price of a domestic
construction material, adequate consideration is at least the
differential established in 25.202(a) or in accordance with agency
procedures.
25.206 Noncompliance.
The contracting officer must--
(a) Review allegations of Buy American Act violations;
(b) Unless fraud is suspected, notify the contractor of the
apparent unauthorized use of foreign construction material and request
a reply, to include proposed corrective action; and
(c) If the review reveals that a contractor or subcontractor has
used foreign construction material without authorization, take
appropriate action, including one or more of the following:
(1) Process a determination concerning the inapplicability of the
Buy American Act in accordance with 25.205.
(2) Consider requiring the removal and replacement of the
unauthorized foreign construction material.
(3) If removal and replacement of foreign construction material
incorporated in a building or work would be impracticable, cause undue
delay, or otherwise be detrimental to the interests of the Government,
the contracting officer may determine in writing that the foreign
construction material need not be removed and replaced. A determination
to retain foreign construction material does not constitute a
determination that an exception to the Buy American Act applies, and
this should be stated in the determination. Further, a determination to
retain foreign construction material does not affect the Government's
right to suspend or debar a contractor, subcontractor, or supplier for
violation of the Buy American Act, or to exercise other contractual
rights and remedies, such as reducing the contract price or terminating
the contract for default.
(4) If the noncompliance is sufficiently serious, consider
exercising appropriate contractual remedies, such as terminating the
contract for default. Also consider preparing and forwarding a report
to the agency suspending or debarring official in accordance with
Subpart 9.4. If the noncompliance appears to be fraudulent, refer the
matter to other appropriate agency officials, such as the officer
responsible for criminal investigation.
Subpart 25.3--Balance of Payments Program
25.300 Scope of subpart.
This subpart provides policies and procedures implementing the
Balance of Payments Program. It applies to contracts for the purchase
of supplies for use outside the United States, and contracts for
construction, alteration, or repair of any public building or public
work outside the United States.
25.301 General.
The Balance of Payments Program restricts the purchase of supplies
that are not domestic end products, for use outside the United States,
and restricts the use of construction materials that are not domestic,
for performance of construction contracts outside the United States.
Its restrictions are similar to those of the Buy American Act. It uses
the same definitions and evaluation procedures, except that a 50
percent factor generally is used to determine unreasonable cost.
Exceptions to the Balance of Payments Program, especially for
construction materials, are generally determined prior to solicitation
and assignment of contracting responsibility. The contracting officer
must identify excepted supplies and construction materials in the
contract.
25.302 Policy.
Except as provided in 25.303, acquire only domestic end products
for use outside the United States, and use only domestic construction
materials for construction, repair, or maintenance of real property
outside the United States.
25.303 Exceptions.
A foreign end product may be acquired for use outside the United
States, or a foreign construction material may be used in construction
outside the United States, without regard to the restrictions of the
Balance of Payments Program if--
(a) The estimated cost of the end product does not exceed the
simplified acquisition threshold;
(b) The end product or construction material is listed at 25.104,
or the head of the contracting activity determines that a requirement--
(1) Can only be filled by a foreign end product or construction
material (see 25.103(b));
(2) Is for end products or construction materials that, by their
nature or as a practical matter, can only be acquired in the geographic
area concerned, e.g., ice or books; or bulk material, such as sand,
gravel, or other soil material, stone, concrete masonry units, or fired
brick; or
(3) Is for perishable subsistence products and delivery from the
United States would significantly impair their quality at the point of
consumption;
(c) The acquisition of foreign end products is required by a treaty
or executive agreement between governments;
(d) The end products are--
(1) Petroleum products; or
(2) For commissary resale;
(e) The end products are eligible products subject to the Trade
Agreements Act, NAFTA, or the Israeli Trade Act, or the construction
material is subject to the Trade Agreements Act or NAFTA;
[[Page 72425]]
(f) The cost of the domestic end product or construction material
(including transportation and handling costs) exceeds the cost of the
foreign end product or construction material by more than 50 percent,
or a higher percentage specifically authorized by the head of the
agency; or
(g) The head of the agency has determined that it is not in the
public interest to apply the restrictions of the Balance of Payments
Program to the end product or construction material or that it is
impracticable to apply the restrictions of the Balance of Payments
Program to the construction material.
25.304 Procedures.
(a) Solicitation of offers. The contracting officer must identify,
in the solicitation, supplies and construction materials known in
advance to be excepted from the procedures of this subpart.
(b) Evaluation of offers. The contracting officer must--
(1) Evaluate offers for supplies in accordance with Subpart 25.5;
and
(2) Evaluate offers proposing foreign construction material by
using the procedures at 25.204, except that a factor of 50 percent or a
higher percentage (see 25.303(f)) must be applied to foreign
construction material proposed for exception from the requirements of
the Balance of Payments Program on the basis of unreasonable cost of
domestic construction materials.
(c) Other procedures for construction. For construction contracts,
the procedures at 25.203, 25.205, and 25.206, for determinations and
noncompliance under the Buy American Act, are also applicable to
determinations and noncompliance under the Balance of Payments Program.
Subpart 25.4--Trade Agreements
25.400 Scope of subpart.
(a) This subpart provides policies and procedures applicable to
acquisitions that are subject to
(1) The Trade Agreements Act (the Agreement on Government
Procurement, as approved by Congress in the Trade Agreements Act of
1979 (19 U.S.C. 2501, et seq.), and as amended by the Uruguay Round
Agreements Act (Pub. L. 103-465));
(2) The Caribbean Basin Trade Initiative (the determination of the
U.S. Trade Representative that end products granted duty-free entry
under the Caribbean Basin Economic Recovery Act (19 U.S.C. 2701, et
seq.) must be treated as eligible products under the Trade Agreements
Act);
(3) NAFTA (the North American Free Trade Agreement, as approved by
Congress in the North American Free Trade Agreement Implementation Act
of 1993 (19 U.S.C. 3301 note));
(4) The Israeli Trade Act (the U.S.-Israel Free Trade Area
Agreement, as approved by Congress in the United States-Israel Free
Trade Area Implementation Act of 1985 (19 U.S.C. 2112 note)); or
(5) The Agreement on Trade in Civil Aircraft (U.S. Trade
Representative waiver of the Buy American Act for signatories of the
Agreement on Trade in Civil Aircraft, as implemented in the Trade
Agreements Act of 1979 (19 U.S.C. 2513)).
(b) For application of the trade agreements that are unique to
individual agencies, see agency regulations.
25.401 Exceptions.
(a) This subpart does not apply to--
(1) Acquisitions set aside for small businesses;
(2) Acquisitions of arms, ammunition, or war materials, or
purchases indispensable for national security or for national defense
purposes, including all services purchased in support of military
forces located overseas;
(3) Acquisitions of end products for resale;
(4) Acquisitions under Subpart 8.6, Acquisition from Federal Prison
Industries, Inc., and Subpart 8.7, Acquisition from Nonprofit Agencies
Employing People Who Are Blind or Severely Disabled;
(5) Other acquisitions not using full and open competition, if
authorized by Subpart 6.2 or 6.3, when the limitation of competition
would preclude use of the procedures of this subpart (but see 6.303-
1(d)); or sole source acquisitions justified in accordance with
13.501(a); and
(6) Acquisitions of the following excluded services:
(i) Automatic data processing (ADP) telecommunications and
transmission services, except enhanced (i.e., value-added)
telecommunications services.
(ii) Research and development.
(iii) Transportation services (including launching services, but
not including travel agent services).
(iv) Utility services.
(b)(1) Other services not covered by the Trade Agreements Act are--
(i) Dredging; and
(ii) Management and operation contracts to certain Government or
privately owned facilities used for Government purposes, including
Federally Funded Research and Development Centers (FFRDCs).
(2) Other services not covered by NAFTA are--
(i) ADP teleprocessing and timesharing services (D305),
telecommunications network management services (D316), automated news
services, data services or other information services (D317), and other
ADP and telecommunications services (D399) (Federal Service Code from
the Federal Procurement Data System Product/Service Code Manual
indicated in parentheses);
(ii) Operation of all facilities by the Department of Defense,
Department of Energy, or the National Aeronautics and Space
Administration; and all Government-owned research and development
facilities or Government-owned environmental laboratories;
(iii) Maintenance, repair, modification, rebuilding and
installation of equipment related to ships; and
(iv) Nonnuclear ship repair.
25.402 General.
The trade agreements waive the applicability of the Buy American
Act or the Balance of Payments Program for some foreign supplies and
construction materials from certain countries. The Trade Agreements Act
and NAFTA specify procurement procedures designed to ensure fairness.
The value of the acquisition is a determining factor in the
applicability of the trade agreements. When the restrictions of the Buy
American Act or the Balance of Payments Program are waived for eligible
products, offers of such products (eligible offers) receive equal
consideration with domestic offers. Under the Trade Agreements Act,
only U.S.-made end products or eligible products may be acquired (also
see 25.403(c)). See Subpart 25.5 for evaluation procedures for supply
contracts subject to trade agreements.
25.403 Trade Agreements Act.
(a) General. The Agreement on Government Procurement of the Trade
Agreements Act--
(1) Waives application of the Buy American Act and the Balance of
Payments Program to the end products and construction materials of
designated countries;
(2) Prohibits discriminatory practices based on foreign ownership;
(3) Restricts purchases to end products identified in 25.403(c);
(4) Requires certain procurement procedures designed to ensure
fairness (see 25.408).
(b) Thresholds. (1) Except as provided in 25.401, the Trade
Agreements Act applies to an acquisition for supplies or services if
the estimated value of the acquisition is $186,000 or more; the
[[Page 72426]]
Trade Agreements Act applies to an acquisition for construction if the
estimated value of the acquisition is $7,143,000 or more. These dollar
thresholds became effective January 1, 1998, and are subject to
revision by the U.S. Trade Representative approximately every 2 years
(see Executive Order 12260).
(2) To determine whether the Trade Agreements Act applies to the
acquisition of products by lease, rental, or lease-purchase contract
(including lease-to-ownership, or lease-with-option-to purchase),
calculate the estimated acquisition value as follows:
(i) If a fixed-term contract of 12 months or less is contemplated,
use the total estimated value of the acquisition.
(ii) If a fixed-term contract of more than 12 months is
contemplated, use the total estimated value of the acquisition plus the
estimated residual value of the leased equipment at the conclusion of
the contemplated term of the contract.
(iii) If an indefinite-term contract is contemplated, use the
estimated monthly payment multiplied by the total number of months that
ordering would be possible under the proposed contract, i.e., the
initial ordering period plus any optional ordering periods.
(iv) If there is any doubt as to the contemplated term of the
contract, use the estimated monthly payment multiplied by 48.
(3) The estimated value includes the value of all options.
(4) If, in any 12-month period, recurring or multiple awards for
the same type of product or products are anticipated, use the total
estimated value of these projected awards to determine whether the
Trade Agreements Act applies. Do not divide any acquisition with the
intent of reducing the estimated value of the acquisition below the
dollar threshold of the Trade Agreements Act.
(c) Purchase restriction. (1) In acquisitions subject to the Trade
Agreements Act, acquire only U.S.-made end products or eligible
products (designated, Caribbean Basin, or NAFTA country end products)
unless offers for such end products are either not received or are
insufficient to fulfill the requirements.
(2) This restriction does not apply to purchases by the Department
of Defense from a country with which it has entered into a reciprocal
agreement, as provided in departmental regulations.
25.404 Caribbean Basin Trade Initiative.
Under the Caribbean Basin Trade Initiative, the United States Trade
Representative has determined that, for acquisitions subject to the
Trade Agreements Act, Caribbean Basin country end products must be
treated as eligible products. This determination is effective until
September 30, 1999, except that, for products of Panama, this
determination is effective until September 30, 2000. The U.S. Trade
Representative may extend these dates through a document in the Federal
Register.
25.405 North American Free Trade Agreement (NAFTA).
(a) An acquisition of supplies is not subject to NAFTA if the
estimated value of the acquisition is $25,000 or less. For acquisitions
subject to NAFTA, evaluate offers of NAFTA country end products without
regard to the restrictions of the Buy American Act or the Balance of
Payments Program, except that for acquisitions with an estimated value
of less than $53,150, only Canadian end products are eligible products.
Eligible products from NAFTA countries are entitled to the
nondiscriminatory treatment of the Trade Agreements Act. NAFTA does not
prohibit the purchase of other foreign end products.
(b) NAFTA applies to construction materials if the estimated value
of the construction contract is $6,909,500 or more.
(c) The procedures in 25.408 apply to the acquisition of NAFTA
country services, other than services identified in 25.401. NAFTA
country services are services provided by a firm established in a NAFTA
country under service contracts with an estimated acquisition value of
$53,150 or more ($6,909,500 or more for construction).
25.406 Israeli Trade Act.
Acquisitions of supplies by most agencies are subject to the
Israeli Trade Act, if the estimated value of the acquisition is $50,000
or more but does not exceed the Trade Agreements Act threshold for
supplies (see 25.403(b)(1)). Agencies other than the Department of
Defense, the Department of Energy, the Department of Transportation,
the Bureau of Reclamation of the Department of the Interior, the
Federal Housing Finance Board, and the Office of Thrift Supervision
must evaluate offers of Israeli end products without regard to the
restrictions of the Buy American Act or the Balance of Payments
Program. The Israeli Trade Act does not prohibit the purchase of other
foreign end products.
25.407 Agreement on Trade in Civil Aircraft.
Under the authority of Section 303 of the Trade Agreements Act, the
U.S. Trade Representative has waived the Buy American Act for civil
aircraft and related articles, that meet the substantial transformation
test of the Trade Agreements Act, from countries that are parties to
the Agreement on Trade in Civil Aircraft. Those countries are Austria,
Belgium, Bulgaria, Canada, Denmark, Egypt, Finland, France, Germany,
Greece, Ireland, Italy, Japan, Luxembourg, Macao, the Netherlands,
Norway, Portugal, Romania, Spain, Sweden, Switzerland, and the United
Kingdom.
25.408 Procedures.
(a) If the Trade Agreements Act or NAFTA applies (see 25.401), the
contracting officer must--
(1) Comply with the requirements of 5.203, Publicizing and response
time;
(2) Comply with the requirements of 5.207, Preparation and
Transmittal of Synopses, including the appropriate ``Numbered Note''
(5.207(e)(2)) for contracts that are subject to the Trade Agreements
Act;
(3) Not include technical requirements in solicitations solely to
preclude the acquisition of eligible products;
(4) Specify in solicitations that offerors must submit offers in
the English language and in U.S. dollars (see 52.214-34, Submission of
Offers in the English Language, and 52.214-35, Submission of Offers in
U.S. Currency, or paragraph (c)(5) of 52.215-1, Instruction to
Offerors--Competitive Acquisitions); and
(5) Provide unsuccessful offerors from designated or NAFTA
countries notice in accordance with 14.409-1 or 15.503.
(b) See Subpart 25.5 for evaluation procedures and examples.
Subpart 25.5--Evaluating Foreign Offers--Supply Contracts
25.501 General.
The contracting officer--
(a) Must apply the evaluation procedures of this subpart to each
line item of an offer unless either the offer or the solicitation
specifies evaluation on a group basis (see 25.503);
(b) May rely on the offeror's certification of end product origin
when evaluating a foreign offer;
(c) Must identify and reject offers of end products that are
prohibited or sanctioned in accordance with Subparts 25.6 and 25.7; and
(d) Must not use the Buy American Act and Balance of Payments Program
evaluation factors prescribed in this subpart to provide a preference
for one foreign offer over another foreign offer.
[[Page 72427]]
25.502 Application.
(a) Unless otherwise specified in agency regulations, perform the
following steps in the order presented:
(1) Eliminate all offers or offerors that are unacceptable for
reasons other than price; e.g., nonresponsive, debarred or suspended,
sanctioned (see Subpart 25.6), or a prohibited source (see Subpart
25.7).
(2) Rank the remaining offers by price.
(3) If the solicitation specifies award on the basis of factors in
addition to cost or price, apply the evaluation factors as specified in
this section and use the evaluated cost or price in determining the
offer that represents the best value to the Government.
(b) For acquisitions subject to the Trade Agreements Act (see
25.401 and 25.403(b))--
(1) Consider only offers of U.S.-made, designated country,
Caribbean Basin country, or NAFTA country end products, unless no
offers of such end products were received;
(2) If the agency gives the same consideration given eligible
offers to offers of U.S.-made end products that are not domestic end
products, award on the low offer. Otherwise, evaluate in accordance
with agency procedures; and
(3) If there were no offers of U.S.-made, designated country,
Caribbean Basin country, or NAFTA country end products, make a
nonavailability determination (see 25.103(b)(2)) and award on the low
offer (see 25.403(c)).
(c) For acquisitions not subject to the Trade Agreements Act, but
subject to the Buy American Act or the Balance of Payments Program
(NAFTA or the Israeli Trade Act also may apply), the following applies:
(1) If the low offer is a domestic offer or an eligible offer under
NAFTA or the Israeli Trade Act, award on that offer.
(2) If the low offer is a noneligible offer and there were no
domestic offers (see 25.103(b)(3)), award on the low offer.
(3) If the low offer is a noneligible offer and there is an
eligible offer that is lower than the lowest domestic offer, award on
the low offer. The Buy American Act and the Balance of Payments Program
provide an evaluation preference only for domestic offers.
(4) Otherwise, apply the appropriate evaluation factor provided in
25.105 or 25.304 to the low offer.
(i) If the evaluated price of the low offer remains less than the
lowest domestic offer, award on the low offer.
(ii) If the price of the lowest domestic offer is less than the
evaluated price of the low offer, award on the lowest domestic offer.
(d) Ties. (1) If application of an evaluation factor results in a
tie between a domestic offer and a foreign offer, award on the domestic
offer.
(2) If no evaluation preference was applied (i.e., offers afforded
nondiscriminatory treatment under the Buy American Act or Balance of
Payments Program), resolve ties between domestic and foreign offers by
a witnessed drawing of lots by an impartial individual.
(3) Resolve ties between foreign offers from small business
concerns (under the Buy American Act and Balance of Payments Program, a
small business offering a manufactured article that does not meet the
definition of ``domestic end product'' is a foreign offer) or foreign
offers from a small business concern and a large business concern in
accordance with 14.408-6(a).
25.503 Group offers.
(a) If the solicitation or an offer specifies that award can be
made only on a group of line items or on all line items contained in
the solicitation or offer, reject the offer--
(1) If any part of the award would consist of sanctioned or
prohibited end products (see Subparts 25.6 and 25.7); or
(2) If the Trade Agreements Act applies and any part of the offer
consists of items restricted in accordance with 25.403(c).
(b) If an offer restricts award to a group of line items or to all
line items contained in the offer, determine for each line item whether
to apply an evaluation factor (see 25.504-4, Example 1).
(1) First, evaluate offers that do not specify an award restriction
on a line item basis in accordance with 25.502, determining a tentative
award pattern by selecting for each line item the offer with the lowest
evaluated price.
(2) Evaluate an offer that specifies an award restriction against
the offered prices of the tentative award pattern, applying the
appropriate evaluation factor on a line item basis.
(3) Compute the total evaluated price for the tentative award
pattern and the offer that specified an award restriction.
(4) Unless the total evaluated price of the offer that specified an
award restriction is less than the total evaluated price of the
tentative award pattern, award based on the tentative award pattern.
(c) If the solicitation specifies that award will be made only on a
group of line items or all line items contained in the solicitation,
determine the category of end products on the basis of each line item,
but determine whether to apply an evaluation factor on the basis of the
group of items (see 25.504-4, Example 2).
(1) If the proposed price of domestic end products exceeds 50
percent of the total proposed price of the group, evaluate the entire
group as a domestic offer. Evaluate all other groups as foreign offers.
(2) For foreign offers, if the proposed price of domestic end
products and eligible products exceeds 50 percent of the total proposed
price of the group, evaluate the entire group as an eligible offer.
(3) Apply the evaluation factor to the entire group in accordance
with 25.502.
25.504 Evaluation examples.
The following examples illustrate the application of the evaluation
procedures in 25.502 and 25.503. The examples assume that the
contracting officer has eliminated all offers that are unacceptable for
reasons other than price or a trade agreement (see 25.502(a)(1)).
Although these examples are generally constructed in terms of the Buy
American Act, the same evaluation procedures would apply under the
Balance of Payments Program. The evaluation factor may change as
provided in agency regulations.
25.504-1 Buy American Act/Balance of Payments Program.
(a)(1) Example 1.
Offer A............................. $12,000 Domestic end product,
small business.
Offer B............................. 11,700 Domestic end product,
small business.
Offer C............................. 10,000 U.S.-made end product
(not domestic), small
business.
(2) Analysis: This acquisition is for end products for use in the
United States and is set aside for small business concerns. The Buy
American Act applies. Since the acquisition value is less than $25,000
and the acquisition is set aside, none of the trade agreements apply.
Perform the steps in 25.502(a). Offer C is evaluated as a foreign end
product because it is the product of a small business, but is not a
domestic end product (see 25.502(c)(4)). Since Offer B is a domestic
offer, apply the 12 percent factor to Offer C (see 25.105(b)(2)). The
resulting evaluated price of $11,200 remains lower than Offer B. The
cost of Offer B is therefore unreasonable (see 25.105(c)). Award on
Offer C at $10,000 (see 25.502(c)(4)(i)).
(b)(1) Example 2.
Offer A............................. $110,000 Domestic end product,
small business.
[[Page 72428]]
Offer B............................. 107,000 Domestic end product,
small business.
Offer C............................. 102,000 U.S.-made end product
(not domestic), small
business.
(2) Analysis: This acquisition is for end products for use outside
the United States and is set aside for small business concerns. Since
the value of the acquisition exceeds the simplified acquisition
threshold, the Balance of Payments Program applies. While the
acquisition value exceeds $25,000, none of the trade agreements apply
because the acquisition is set aside. Perform the steps in 25.502(a).
Offer C is evaluated as a foreign end product because it is the product
of a small business, but is not a domestic end product (see
25.502(c)(4)). After applying the 50 percent factor, the evaluated
price of Offer C is $153,000. Award on Offer B at $107,000 (see
25.502(c)(4)(ii)).
25.504-2 Trade Agreements Act/Caribbean Basin Trade Initiative/NAFTA.
Example 1.
Offer A............................. $204,000 U.S.-made end product
(not domestic).
Offer B............................. 203,000 U.S.-made end product
(domestic), small
business.
Offer C............................. 200,000 Eligible product.
Offer D............................. 195,000 Noneligible product
(not U.S.-made).
Analysis: Eliminate Offer D because the Trade Agreements Act
applies and there is an offer of a U.S.-made or an eligible product
(see 25.502(b)(1)). If the agency gives the same consideration given
eligible offers to offers of U.S.-made end products that are not
domestic offers, it is unnecessary to determine if U.S.-made end
products are domestic (large or small business). No further analysis is
necessary. Award on the low remaining offer, Offer C (see
25.502(b)(2)).
25.504-3 NAFTA/Israeli Trade Act.
(a) Example 1.
Offer A............................. $105,000 Domestic end product,
small business.
Offer B............................. 100,000 Eligible product.
Analysis: Since the low offer is an eligible offer, award on the
low offer (see 25.502(c)(1)).
(b) Example 2.
Offer A............................. $105,000 Eligible product.
Offer B............................. 103,000 Noneligible product.
Analysis: Since the acquisition is not subject to the Trade
Agreements Act, the contracting officer can consider the noneligible
offer. Since no domestic offer was received, make a nonavailability
determination and award on Offer B (see 25.502(c)(2)).
(c) Example 3.
Offer A............................. $105,000 Domestic end product,
large business.
Offer B............................. 103,000 Eligible product.
Offer C............................. 100,000 Noneligible product.
Analysis: Since the acquisition is not subject to the Trade
Agreements Act, the contracting officer can consider the noneligible
offer. Because the eligible offer (Offer B) is lower than the domestic
offer (Offer A), no evaluation factor applies to the low offer (Offer
C). Award on the low offer (see 25.502(c)(3)).
25.504-4 Group award basis.
(a) Example 1.
----------------------------------------------------------------------------------------------------------------
Offers
Item --------------------------------------------------------------------------
A B C
----------------------------------------------------------------------------------------------------------------
1.................................... DO = $55,000 EL = $56,000 NEL = $50,000
2.................................... NEL = 13,000 EL = 10,000 EL = 13,000
3.................................... NEL = 11,500 DO = 12,000 DO = 10,000
4.................................... NEL = 24,000 EL = 28,000 NEL = 22,000
5.................................... DO = 18,000 NEL = 10,000 DO = 14,000
--------------------------------------------------------------------------
121,500 116,000 109,000
----------------------------------------------------------------------------------------------------------------
Key: DO = Domestic end product; EL = Eligible product; NEL = Noneligible product.
Problem: Offeror C specifies all-or-none award. Assume all offerors
are large businesses. The Trade Agreements Act does not apply.
Analysis: (see 25.503)
STEP 1: Evaluate Offers A & B before considering Offer C and
determine which offer has the lowest evaluated cost for each line
item (the tentative award pattern):
Item 1: Low offer A is domestic; select A.
Item 2: Low offer B is eligible; do not apply factor; select B.
Item 3: Low offer A is noneligible and Offer B is a domestic offer.
Apply a 6 percent factor to Offer A. The evaluated price of Offer A is
higher than Offer B; select B.
Item 4: Low offer A is noneligible. Since neither offer is a
domestic offer, no evaluation factor applies; select A.
Item 5: Low offer B is noneligible; apply a 6 percent factor to
Offer B. Offer A is still higher than Offer B; select B.
STEP 2: Evaluate Offer C against the tentative award pattern for
Offers A and B:
----------------------------------------------------------------------------------------------------------------
Offers
--------------------------------------------------------------------------
Item Tentative award pattern
Low offer from A and B C
----------------------------------------------------------------------------------------------------------------
1.................................... A DO=$55,000 * NEL=$53,000
2.................................... B EL=10,000 EL=13,000
3.................................... B DO=12,000 DO=10,000
4.................................... A NEL=24,000 NEL=22,000
5.................................... B NEL=10,600 DO=14,000
--------------------------------------------------------------------------
[[Page 72429]]
111,600 112,000
----------------------------------------------------------------------------------------------------------------
* Offer + 6 percent.
On a line item basis, apply a factor to any noneligible offer if
the other offer for that line item is domestic.
For Item 1, apply a factor to Offer C because Offer A is
domestic and the acquisition was not subject to the Trade Agreements
Act. The evaluated price of Offer C, Item 1, becomes $53,000
($50,000 plus 6 percent). Apply a factor to Offer B, Item 5, because
it is a noneligible product and Offer C is domestic. The evaluated
price of Offer B is $10,600 ($10,000 plus 6 percent). Evaluate the
remaining items without applying a factor.
STEP 3: The tentative unrestricted award pattern from Offers A
and B is lower than the evaluated price of Offer C. Award the
combination of Offers A and B. Note that if Offer C had not
specified all-or-none award, award would be made on Offer C for line
items 1, 3, and 4, totaling an award of $82,000.
(b) Example 2.
----------------------------------------------------------------------------------------------------------------
Offers
Item --------------------------------------------------------------------------
A B C
----------------------------------------------------------------------------------------------------------------
1.................................... DO=$50,000 EL=$50,500 NEL=$50,000
2.................................... NEL=10,300 NEL=10,000 EL=10,200
3.................................... EL=20,400 EL=21,000 NEL=20,200
4.................................... DO=10,500 DO=10,300 DO=10,400
--------------------------------------------------------------------------
91,200 91,800 90,800
----------------------------------------------------------------------------------------------------------------
Problem: The solicitation specifies award on a group basis.
Assume the Buy American Act applies and the acquisition cannot be
set aside for small business concerns. All offerors are large
businesses.
Analysis: (see 25.503(c))
STEP 1: Determine which of the offers are domestic (see
25.503(c)(1)):
------------------------------------------------------------------------
Domestic [percent] Determination
------------------------------------------------------------------------
A 60,500/91,200=66.3%.............. Domestic
B 10,300/91,800=11.2%.............. Foreign
C 10,400/90,800=11.5%.............. Foreign
------------------------------------------------------------------------
STEP 2: Determine whether foreign offers are eligible or
noneligible offers (see 25.503(c)(2)):
------------------------------------------------------------------------
Domestic + eligible [percent] Determination
------------------------------------------------------------------------
A N/A.............................. Domestic
B 81,800/91,800=89.1%.............. Eligible
C 20,600/90,800=22.7%.............. Noneligible
------------------------------------------------------------------------
STEP 3: Determine whether to apply an evaluation factor (see
25.503(c)(3)). The low offer (Offer C) is a foreign offer. There is
no eligible offer lower than the domestic offer. Therefore, apply
the factor to the low offer. Addition of the 6 percent factor (use
12 percent if Offer A is a small business) to Offer C yields an
evaluated price of $96,248 ($90,800 + 6 percent). Award on Offer A
(see 25.502(c)(4)(ii)). Note that, if Offer A were greater than
Offer B, an evaluation factor would not be applied and award would
be on Offer C (see 25.502(c)(3)).
Subpart 25.6--Trade Sanctions
25.600 Scope of subpart.
This subpart implements sanctions imposed by the President pursuant
to Section 305(g)(1) of the Trade Agreements Act of 1979 (19 U.S.C.
2515(g)(1)), on European Union (EU) member states that discriminate
against U.S. products or services (sanctioned EU member states). This
subpart does not apply to contracts for supplies or services awarded
and performed outside the United States, or to the Department of
Defense. For thresholds unique to individual agencies, see agency
regulations.
25.601 Policy.
(a) Except as provided in 25.602, agencies must not award contracts
for--
(1) Sanctioned EU country end products with an estimated
acquisition value less than $186,000;
(2) Sanctioned EU country construction with an estimated
acquisition value less than $7,143,000; or
(3) Sanctioned EU country services as follows (Federal Service Code
or Category from the Federal Procurement Data System Product/Service
Code Manual is indicated in parentheses):
(i) Service contracts regardless of acquisition value for--
(A) All transportation services, including launching services (all
V codes, J019, J998, J999, and K019);
(B) Dredging (Y216 and Z216);
(C) Management and operation of certain Government or privately
owned facilities used for Government purposes, including federally
funded research and development centers (all M codes);
(D) Development, production or coproduction of program material for
broadcasting, such as motion pictures (T006 and T016);
(E) Research and development (all A codes);
(F) Airport concessions (S203);
(G) Legal services (R418);
(H) Hotel and restaurant services (S203);
(I) Placement and supply of personnel services (V241 and V251);
(J) Investigation and security services (S206, S211, and R423);
(K) Education and training services (all U codes and R419);
(L) Health and social services (all O and G codes);
(M) Recreational, cultural, and sporting services (G003); or
(N) Telecommunications services (encompassing only voice telephony,
telex, radio telephony, paging, and satellite services) (S1, D304,
D305, D316, D317, and D399).
(ii) All other service contracts with an estimated acquisition
value less than $186,000.
(b) Determine the applicability of sanction thresholds in the
manner provided at 25.403(b).
25.602 Exceptions.
(a) The sanctions in 25.601 do not apply to--
(1) Purchases at or below the simplified acquisition threshold
awarded using simplified acquisition procedures;
(2) Total small business set-asides in accordance with 19.502-2;
(3) Contracts in support of U.S. national security interests; or
(4) Contracts for essential spare, repair, or replacement parts not
otherwise available from nonsanctioned countries.
[[Page 72430]]
(b)(1) The head of the agency, without power of redelegation, may
authorize the award of a contract or class of contracts for sanctioned
EU country end products, services, and construction, the purchase of
which is otherwise prohibited by 25.601(a), if the head of the agency
determines that such action is necessary--
(i) In the public interest;
(ii) To avoid the restriction of competition in a manner that would
limit the acquisition in question to, or would establish a preference
for, the services, articles, materials, or supplies of a single
manufacturer or supplier; or
(iii) Because there would be or are an insufficient number of
potential or actual offerors to ensure the acquisition of services,
articles, materials, or supplies of requisite quality at competitive
prices.
(2) When the head of the agency makes a determination in accordance
with paragraph (b)(1) of this section, the agency must notify the U.S.
Trade Representative within 30 days after contract award.
Subpart 25.7--Prohibited Sources
25.701 Restrictions.
(a) The Government generally does not acquire supplies or services
that cannot be imported lawfully into the United States. Therefore,
even for overseas use, agencies and their contractors and
subcontractors must not acquire any supplies or services originating
from sources within, or that were located in or transported from or
through--
(1) Cuba (31 CFR part 515);
(2) Iran (31 CFR part 560);
(3) Iraq (31 CFR part 575);
(4) Libya (31 CFR part 550);
(5) North Korea (31 CFR part 500); or
(6) Sudan (31 CFR part 538).
(b) Agencies and their contractors and subcontractors must not
acquire any supplies or services from entities controlled by the
Government of Iraq or other specially designated nationals (31 CFR
Chapter V, Appendix A).
25.702 Source of further information.
Questions concerning the restrictions in 25.701 should be referred
to the Department of the Treasury, Office of Foreign Assets Control,
Washington, DC 20220 (Telephone (202) 622-2520).
Subpart 25.8--Other International Agreements and Coordination
25.801 General.
Treaties and agreements between the United States and foreign
governments affect the evaluation of offers from foreign entities and
the performance of contracts in foreign countries.
25.802 Procedures.
(a) When placing contracts with contractors located outside the
United States, for performance outside the United States, contracting
officers must--
(1) Determine the existence and applicability of any international
agreements and ensure compliance with these agreements; and
(2) Conduct the necessary advance acquisition planning and
coordination between the appropriate U.S. executive agencies and
foreign interests as required by these agreements.
(b) The Department of State publishes many international agreements
in the ``United States Treaties and Other International Agreements''
series. Copies of this publication normally are available in overseas
legal offices and U.S. diplomatic missions.
(c) Contracting officers must award all contracts with Taiwanese
firms or organizations through the American Institute of Taiwan (AIT).
AIT is under contract to the Department of State.
Subpart 25.9--Customs and Duties
25.900 Scope of subpart.
This subpart provides policies and procedures for exempting from
import duties certain supplies purchased under Government contracts.
25.901 Policy.
United States laws impose duties on foreign supplies imported into
the customs territory of the United States. Certain exemptions from
these duties are available to Government agencies. Agencies must use
these exemptions when the anticipated savings to appropriated funds
will outweigh the administrative costs associated with processing
required documentation.
25.902 Procedures.
For regulations governing importations and duties, see the Customs
Regulations issued by the U.S. Customs Service, Department of the
Treasury (19 CFR Chapter 1). Except as provided elsewhere in the
Customs Regulations (see 19 CFR 10.100), all shipments of imported
supplies purchased under Government contracts are subject to the usual
Customs entry and examination requirements. Unless the agency obtains
an exemption (see 25.903), those shipments are also subject to duty.
25.903 Exempted supplies.
(a) Subchapters VIII and X of Chapter 98 of the Harmonized Tariff
Schedule of the United States (19 U.S.C. 1202) list supplies for which
exemptions from duty may be obtained when imported into the customs
territory of the United States under a Government contract. For certain
of these supplies, the contracting agency must certify to the
Commissioner of Customs that they are for the purpose stated in the
Harmonized Tariff Schedule (see 19 CFR 10.102-104, 10.114, and 10.121
and 15 CFR part 301 for requirements and formats).
(b) Supplies (excluding equipment) for Government-operated vessels
or aircraft may be withdrawn from any customs-bonded warehouse, from
continuous customs custody elsewhere than in a bonded warehouse, or
from a foreign-trade zone, free of duty and internal revenue tax as
provided in 19 U.S.C. 1309 and 1317. The contracting activity must cite
this authority on the appropriate customs form when making purchases
(see 19 CFR 10.59--10.65).
Subpart 25.10--Additional Foreign Acquisition Regulations
25.1001 Waiver of right to examination of records.
(a) Policy. The clause at 52.215-2, Audit and Records--Negotiation,
prescribed at 15.209(b), and paragraph (d) of the clause at 52.212-5,
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items, prescribed at 12.301(b)(4),
implement 10 U.S.C. 2313 and 41 U.S.C. 254d. The basic clauses
authorize examination of records by the Comptroller General.
(1) Insert the appropriate basic clause, whenever possible, in
negotiated contracts with foreign contractors.
(2) The contracting officer may use 52.215-2 with its Alternate III
or 52.212-5 with its Alternate I after--
(i) Exhausting all reasonable efforts to include the basic clause;
(ii) Considering factors such as alternate sources of supply,
additional cost, and time of delivery; and
(iii) The head of the agency has executed a determination and
findings in accordance with paragraph (b) of this section, with the
concurrence of the Comptroller General. However, concurrence of the
Comptroller General is not required if the contractor is a foreign
government or agency thereof or is precluded by the laws of the country
involved from making its records available for examination.
(b) Determination and findings. The determination and findings
must--
(1) Identify the contract and its purpose, and identify if the
contract is with a foreign contractor or with a
[[Page 72431]]
foreign government or an agency of a foreign government;
(2) Describe the efforts to include the basic clause;
(3) State the reasons for the contractor's refusal to include the
basic clause;
(4) Describe the price and availability of the supplies or services
from the United States and other sources; and
(5) Determine that it will best serve the interest of the United
States to use the appropriate alternate clause in paragraph (a)(2) of
this section.
25.1002 Use of foreign currency.
(a) Unless an international agreement or the Trade Agreements Act
(see 25.408(a)(3)) requires a specific currency, contracting officers
must determine whether solicitations for contracts to be entered into
and performed outside the United States will require submission of
offers in U.S. currency or a specified foreign currency. In unusual
circumstances, the contracting officer may permit submission of offers
in other than a specified currency.
(b) To ensure a fair evaluation of offers, solicitations generally
should require all offers to be priced in the same currency. However,
if the solicitation permits submission of offers in other than a
specified currency, the contracting officer must convert the offered
prices to U.S. currency for evaluation purposes. The contracting
officer must use the current market exchange rate from a commonly used
source in effect as follows:
(1) For acquisitions conducted using sealed bidding procedures, on
the date of bid opening.
(2) For acquisitions conducted using negotiation procedures--
(i) On the date specified for receipt of offers, if award is based
on initial offers; otherwise
(ii) On the date specified for receipt of final proposal revisions.
(c) If a contract is priced in foreign currency, the agency must
ensure that adequate funds are available to cover currency fluctuations
to avoid a violation of the Anti-Deficiency Act (31 U.S.C. 1341, 1342,
1511-1519).
Subpart 25.11--Solicitation Provisions and Contract Clauses
25.1101 Acquisition of supplies.
The following provisions and clauses apply to the acquisition of
supplies and the acquisition of services involving the furnishing of
supplies.
(a)(1) Insert the clause at 52.225-1, Buy American Act--Balance of
Payments Program--Supplies, in solicitations and contracts with a value
exceeding $2,500 but not exceeding $25,000; and in solicitations and
contracts with a value exceeding $25,000, if none of the clauses
prescribed in paragraphs (b) and (c) of this section apply, except if--
(i) The solicitation is restricted to domestic end products in
accordance with Subpart 6.3;
(ii) The acquisition is for supplies for use within the United
States and an exception to the Buy American Act applies (e.g.,
nonavailability or public interest); or
(iii) The acquisition is for supplies for use outside the United
States and an exception to the Balance of Payments Program applies.
(2) Insert the provision at 52.225-2, Buy American Act--Balance of
Payments Program Certificate, in solicitations containing the clause at
52.225-1.
(b)(1)(i) Insert the clause at 52.225-3, Buy American Act--North
American Free Trade Agreement--Israeli Trade Act--Balance of Payments
Program, in solicitations and contracts with a value exceeding $25,000
but less than $186,000, unless--
(A) The acquisition is for the acquisition of supplies, or for
services involving the furnishing of supplies, for use outside the
United States, and the value of the acquisition is less than the
simplified acquisition threshold; or
(B) The acquisition is exempt from the North American Free Trade
Agreement and the Israeli Trade Act (see 25.401). For acquisitions of
agencies not subject to the Israeli Trade Act (see 25.406), see agency
regulations.
(ii) If the acquisition value exceeds $25,000 but is less than
$50,000, use the clause with its Alternate I.
(iii) If the acquisition value is $50,000 or more but less than
$53,150, use the clause with its Alternate II.
(2)(i) Insert the provision at 52.225-4, Buy American Act--North
American Free Trade Agreement--Israeli Trade Act--Balance of Payments
Program Certificate, in solicitations containing the clause at 52.225-
3.
(ii) If the acquisition value exceeds $25,000 but is less than
$50,000, use the provision with its Alternate I.
(iii) If the acquisition value is $50,000 or more but less than
$53,150, use the provision with its Alternate II.
(c)(1) Insert the clause at 52.225-5, Trade Agreements, in
solicitations and contracts valued at $186,000 or more, if the Trade
Agreements Act applies (see 25.401 and 25.403) and the agency has
determined that the restrictions of the Buy American Act or Balance of
Payments Program are not applicable to U.S.-made end products, unless
the acquisition is to be awarded and performed outside the United
States in support of a contingency operation or a humanitarian or
peacekeeping operation and does not exceed the increased simplified
acquisition threshold of $200,000. If the agency has not made such a
determination, the contracting officer must follow agency procedures.
(2) Insert the provision at 52.225-6, Trade Agreements Certificate,
in solicitations containing the clause at 52.225-5.
(d) Insert the provision at 52.225-7, Waiver of Buy American Act
for Civil Aircraft and Related Articles, in solicitations for civil
aircraft and related articles (see 25.407), if the acquisition value is
less than $186,000.
(e) Insert the clause at 52.225-8, Duty-Free Entry, in
solicitations and contracts for supplies that may be imported into the
United States and for which duty-free entry may be obtained in
accordance with 25.903(a), if the value of the acquisition--
(1) Exceeds $100,000; or
(2) Is $100,000 or less, but the savings from waiving the duty is
anticipated to be more than the administrative cost of waiving the
duty. When used for acquisitions valued at $100,000 or less, the
contracting officer may modify paragraphs (b)(1) and (i)(2) of the
clause to reduce the dollar figure.
25.1102 Acquisition of construction.
(a) Insert the clause at 52.225-9, Buy American Act--Balance of
Payments Program--Construction Materials, in solicitations and
contracts for construction valued at less than $6,909,500.
(1) List in paragraph (b)(2) of the clause all foreign construction
material excepted from the requirements of the Buy American Act.
(2) If the head of the agency determines that a higher percentage
is appropriate, substitute the higher evaluation percentage in
paragraph (b)(3)(i) of the clause.
(b)(1) Insert the provision at 52.225-10, Notice of Buy American
Act/Balance of Payments Program Requirement--Construction Materials, in
solicitations containing the clause at 52.225-9.
(2) If insufficient time is available to process a determination
regarding the inapplicability of the Buy American Act or Balance of
Payments Program prior to receipt of offers, use the provision with its
Alternate I.
(c) Insert the clause at 52.225-11, Buy American Act--Balance of
Payments Program--Construction Materials under Trade Agreements, in
solicitations and contracts valued at $6,909,500 or more.
[[Page 72432]]
(1) List in paragraph (b)(3) of the clause all foreign construction
material excepted from the requirements of the Buy American Act, other
than designated country or NAFTA country construction material.
(2) If the head of the agency determines that a higher percentage
is appropriate, substitute the higher evaluation percentage in
paragraph (b)(4)(i) of the clause.
(3) For acquisitions valued at $6,909,500 or more, but less than
$7,143,000, use the clause with its Alternate I.
(d)(1) Insert the provision at 52.225-12, Notice of Buy American
Act/Balance of Payments Program Requirement--Construction Materials
under Trade Agreements, in solicitations containing the clause at
52.225-11.
(2) If insufficient time is available to process a determination
regarding the inapplicability of the Buy American Act or Balance of
Payments Program before receipt of offers, use the provision with its
Alternate I.
25.1103 Other provisions and clauses.
(a) Restrictions on certain foreign purchases. Insert the clause at
52.225-13, Restrictions on Certain Foreign Purchases, in solicitations
and contracts with a value exceeding $2,500.
(b) Translations. Insert the clause at 52.225-14, Inconsistency
Between English Version and Translation of Contract, in solicitations
and contracts if anticipating translation into another language.
(c) Sanctions. (1) Except as provided in paragraph (c)(2) of this
section, insert the clause at--
(i) 52.225-15, Sanctioned European Union Country End Products, in
solicitations and contracts for supplies valued at less than $186,000;
or
(ii) 52.225-16, Sanctioned European Union Country Services, in
solicitations and contracts for services--
(A) Listed in 25.601(a)(3)(i); or
(B) Valued at less than $186,000.
(2) Do not insert the clauses in paragraph (c)(1) of this section
in--
(i) Solicitations issued and contracts awarded by a contracting
activity located outside of the United States, provided the supplies
will be used or the services will be performed outside of the United
States;
(ii) Purchases at or below the simplified acquisition threshold
awarded using simplified acquisition procedures;
(iii) Total small business set-asides;
(iv) Contracts in support of U.S. national security interests;
(v) Contracts for essential spare, repair, or replacement parts
available only from sanctioned EU member states; or
(vi) Contracts for which the head of the agency has made a
determination in accordance with 25.602(b).
(d) Foreign currency offers. Insert the provision at 52.225-17,
Evaluation of Foreign Currency Offers, in solicitations that permit the
use of other than a specified currency. Insert in the provision the
source of the rate to be used in the evaluation of offers.
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
36.102 [Amended]
17. Amend section 36.102 by removing the definition
``Construction''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
18. Amend section 52.212-3 by revising the date of the provision
and paragraphs (f) and (g) to read as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
Offeror Representations and Certifications--Commercial Items (Feb 2000)
* * * * *
(f) Buy American Act--Balance of Payments Program Certificate.
(Applies only if the clause at Federal Acquisition Regulation (FAR)
52.225-1, Buy American Act--Balance of Payments Program--Supplies,
is included in this solicitation.)
(1) The offeror certifies that each end product, except those
listed in paragraph (f)(2) of this provision, is a domestic end
product as defined in the clause of this solicitation entitled ``Buy
American Act--Balance of Payments Program--Supplies'' and that the
offeror has considered components of unknown origin to have been
mined, produced, or manufactured outside the United States. The
offeror shall list as foreign end products those end products
manufactured in the United States that do not qualify as domestic
end products.
(2) Foreign End Products:
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
(List as necessary)
(3) The Government will evaluate offers in accordance with the
policies and procedures of FAR Part 25.
(g)(1) Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program Certificate. (Applies
only if the clause at FAR 52.225-3, Buy American Act--North American
Free Trade Agreement--Israeli Trade Act--Balance of Payments
Program, is included in this solicitation.)
(i) The offeror certifies that each end product, except those
listed in paragraph (g)(1)(ii) or (g)(1)(iii) of this provision, is
a domestic end product as defined in the clause of this solicitation
entitled ``Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program'' and that the
offeror has considered components of unknown origin to have been
mined, produced, or manufactured outside the United States.
(ii) The offeror certifies that the following supplies are NAFTA
country end products or Israeli end products as defined in the
clause of this solicitation entitled ``Buy American Act--North
American Free Trade Agreement--Israeli Trade Act--Balance of
Payments Program'':
NAFTA Country or Israeli End Products
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
(List as necessary)
(iii) The offeror shall list those supplies that are foreign end
products (other than those listed in paragraph (g)(1)(ii) of this
provision) as defined in the clause of this solicitation entitled
``Buy American Act--North American Free Trade Agreement--Israeli
Trade Act--Balance of Payments Program.'' The offeror shall list as
other foreign end products those end products manufactured in the
United States that do not qualify as domestic end products.
Other Foreign End Products
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
(List as necessary)
(iv) The Government will evaluate offers in accordance with the
policies and procedures of FAR Part 25.
(2) Buy American Act--North American Free Trade Agreements--
Israeli Trade Act--Balance of Payments Program Certificate,
Alternate I (Feb 2000). If Alternate I to the clause at FAR 52.225-3
is included in this solicitation, substitute the following paragraph
(g)(1)(ii) for paragraph (g)(1)(ii) of the basic provision:
(g)(1)(ii) The offeror certifies that the following supplies are
Canadian end products as defined in the clause of this solicitation
entitled ``Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program'':
Canadian End Products
Line Item No.:---------------------------------------------------------
(List as necessary)
(3) Buy American Act--North American Free Trade Agreements--
Israeli Trade Act--Balance of Payments Program Certificate,
Alternate II (Feb 2000). If Alternate II to the clause at FAR
52.225-3 is included in this solicitation, substitute the following
paragraph (g)(1)(ii) for paragraph (g)(1)(ii) of the basic
provision:
(g)(1)(ii) The offeror certifies that the following supplies are
Canadian end products or Israeli end products as defined in the
clause of this solicitation entitled ``Buy American Act--North
American Free Trade Agreement--Israeli Trade Act--Balance of
Payments Program'':
Canadian or Israeli End Products
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
(List as necessary)
[[Page 72433]]
(4) Trade Agreements Certificate. (Applies only if the clause at
FAR 52.225-5, Trade Agreements, is included in this solicitation.)
(i) The offeror certifies that each end product, except those
listed in paragraph (g)(4)(ii) of this provision, is a U.S.-made,
designated country, Caribbean Basin country, or NAFTA country end
product, as defined in the clause of this solicitation entitled
``Trade Agreements.''
(ii) The offeror shall list as other end products those end
products that are not U.S.-made, designated country, Caribbean Basin
country, or NAFTA country end products.
Other End Products
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
(List as necessary)
(iii) The Government will evaluate offers in accordance with the
policies and procedures of FAR Part 25. For line items subject to
the Trade Agreements Act, the Government will evaluate offers of
U.S.-made, designated country, Caribbean Basin country, or NAFTA
country end products without regard to the restrictions of the Buy
American Act or the Balance of Payments Program. The Government will
consider for award only offers of U.S.-made, designated country,
Caribbean Basin country, or NAFTA country end products unless the
Contracting Officer determines that there are no offers for such
products or that the offers for such products are insufficient to
fulfill the requirements of the solicitation.
* * * * *
19. Amend section 52.212-5 by revising the date of the clause; by
revising paragraph (a); by revising paragraphs (b)(16) through (b)(21);
and by adding Alternate I after ``(End of clause)'' to read as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items (Feb 2000)
(a) The Contractor agrees to comply with the following FAR
clauses, which are incorporated in this contract by reference, to
implement provisions of law or executive orders applicable to
acquisitions of commercial items:
(1) 52.222-3, Convict Labor (E.O. 11755).
(2) 52.225-13, Restrictions on Certain Foreign Purchases (E.O.'s
12722, 12724, 13059, and 13067).
(3) 52.233-3, Protest after Award (31 U.S.C. 3553).
(b) * * *
____(16) 52.225-1, Buy American Act--Balance of Payments Program--
Supplies (41 U.S.C. 10a-10d).
____(17)(i) 52.225-3, Buy American Act--North American Free Trade
Agreement--Israeli Trade Act--Balance of Payments Program (41 U.S.C.
10a-10d, 19 U.S.C. 3301 note, 19 U.S.C. 2112 note).
____(ii) Alternate I of 52.225-3.
____(iii) Alternate II of 52.225-3.
____(18) 52.225-5, Trade Agreements (19 U.S.C. 2501, et seq., 19
U.S.C. 3301 note).
____(19) 52.225-15, Sanctioned European Union Country End Products
(E.O. 12849).
____(20) 52.225-16, Sanctioned European Union Country Services (E.O.
12849).
____(21) [Reserved]
* * * * *
Alternate I (Feb 2000). As prescribed in 12.301(b)(4), delete
paragraph (d) from the basic clause, redesignate paragraph (e) as
paragraph (d), and revise the reference to ``paragraphs (a), (b),
(c), or (d) of this clause'' in the redesignated paragraph (d) to
read ``paragraphs (a), (b), and (c) of this clause''.
20. Amend section 52.213-4 by--
a. Revising the date of the clause;
b. Redesignating paragraph (a)(1)(ii) as (a)(1)(iii) and adding
a new paragraph (a)(1)(ii);
c. Removing paragraph (a)(2)(i) and redesignating paragraphs
(a)(2)(ii) through (a)(2)(viii) as (a)(2)(i) through (a)(2)(vii),
respectively; and
d. Revising paragraph (b)(1)(viii) to read as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Items) (Feb 2000)
(a)(1) * * *
(ii) 52.225-13, Restrictions on Certain Foreign Purchases (Feb
2000) (E.O.'s 12722, 12724, 13059, and 13067).
* * * * *
(b)(1) * * *
(viii) 52.225-1, Buy American Act--Balance of Payments Program--
Supplies (Feb 2000) (41 U.S.C. 10a-10d) (Applies to contracts for
supplies, and to contracts for services involving the furnishing of
supplies, for use within the United States if the value of the
supply contract or supply portion of a service contract exceeds the
micro-purchase threshold and the acquisition--
(A) Is set aside for small business concerns; or
(B) Cannot be set aside for small business concerns (see 19.502-
2), and does not exceed $25,000.)
* * * * *
52.214-34 [Amended]
21. Amend the introductory paragraph of section 52.214-34 by
removing ``and 25.408(d)''.
52.214-35 [Amended]
22. Amend the introductory paragraph of section 52.214-35 by
removing ``and 25.408(d)''.
23. Amend section 52.215-1 by revising the date of the provision
and paragraph (c)(5) to read as follows:
52.215-1 Instructions to Offerors--Competitive Acquisition.
* * * * *
Instructions to Offerors--Competitive Acquisitions (Feb 2000)
(c) * * *
(5) Offerors shall submit proposals in response to this
solicitation in English, unless otherwise permitted by the
solicitation, and in U.S. dollars, unless the provision at FAR
52.225-17, Evaluation of Foreign Currency Offers, is included in the
solicitation.
* * * * *
24. Revise sections 52.225-1 through 52.225-15; add section 52.225-
16 and 52.225-17; and remove sections 52.225-18 through 52.225-22 to
read as follows:
Subpart 52.2--Text of Provisions and Clauses
Sec.
* * * * *
52.225-1 Buy American Act--Balance of Payments Program--Supplies.
52.225-2 Buy American Act--Balance of Payments Program Certificate.
52.225-3 Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program.
52.225-4 Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program Certificate.
52.225-5 Trade Agreements.
52.225-6 Trade Agreements Certificate.
52.225-7 Waiver of Buy American Act for Civil Aircraft and Related
Articles.
52.225-8 Duty-Free Entry.
52.225-9 Buy American Act--Balance of Payments Program--
Construction Materials.
52.225-10 Notice of Buy American Act/Balance of Payments Program
Requirement--Construction Materials.
52.225-11 Buy American Act--Balance of Payments Program--
Construction Materials under Trade Agreements.
52.225-12 Notice of Buy American Act/Balance of Payments Program
Requirement--Construction Materials under Trade Agreements.
52.225-13 Restrictions on Certain Foreign Purchases.
52.225-14 Inconsistency between English Version and Translation of
Contract.
52.225-15 Sanctioned European Union Country End Products.
52.225-16 Sanctioned European Union Country Services.
52.225-17 Evaluation of Foreign Currency Offers.
* * * * *
52.225-1 Buy American Act--Balance of Payments Program--Supplies.
As prescribed in 25.1101(a)(1), insert the following clause:
Buy American Act--Balance of Payments Program--Supplies (Feb 2000)
(a) Definitions. As used in this clause--
[[Page 72434]]
Component means any item supplied to the Government as part of
an end item or of another component.
Cost of components means--
(1) 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
(2) 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 end product.
Domestic end product means--
(1) An unmanufactured end product mined or produced in the
United States; or
(2) An end product manufactured in the United States, if 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 as those that
the agency determines are not mined, produced, or manufactured in
sufficient and reasonably available commercial quantities of a
satisfactory quality are treated as domestic. Scrap generated,
collected, and prepared for processing in the United States is
considered domestic.
End product means supplies delivered under a line item of a
Government contract.
Foreign end product means an end product other than a domestic
end product.
United States means the 50 States and the District of Columbia,
U.S. territories and possessions, Puerto Rico, the Northern Mariana
Islands, and any other place subject to U.S. jurisdiction, but does
not include leases bases.
(b) The Buy American Act (41 U.S.C. 10a-10d) provides a
preference for domestic end products for supplies acquired for use
in the United States. The Balance of Payments Program provides a
preference for domestic end products for supplies acquired for use
outside the United States.
(c) Offerors may obtain from the Contracting Officer a list of
foreign articles that the Contracting Officer will treat as domestic
for this contract.
(d) The Contractor shall deliver only domestic end products
except to the extent that it specified delivery of foreign end
products in the provision of the solicitation entitled ``Buy
American Act--Balance of Payments Program Certificate.''
(End of clause)
52.225-2 Buy American Act--Balance of Payments Program Certificate.
As prescribed in 25.1101(a)(2), insert the following provision:
Buy American Act--Balance of Payments Program Certificate (Feb 2000)
(a) The offeror certifies that each end product, except those
listed in paragraph (b) of this provision, is a domestic end product
as defined in the clause of this solicitation entitled ``Buy
American Act--Balance of Payments Program--Supplies'' and that the
offeror has considered components of unknown origin to have been
mined, produced, or manufactured outside the United States. The
offeror shall list as foreign end products those end products
manufactured in the United States that do not qualify as domestic
and products.
(b) Foreign End Products:
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
(List as necessary)
(c) The Government will evaluate offers in accordance with the
policies and procedures of Part 25 of the Federal Acquisition
Regulation.
(End of provision)
52.225-3 Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program.
As prescribed in 25.1101(b)(1)(i), insert the following clause:
Buy American Act--North American Free Trade Agreement--Israeli Trade
Act--Balance of Payments Program (Feb 2000)
(a) Definitions. As used in this clause--
Component means any item supplied to the Government as part of
an end item or of another component.
Cost of components means--
(1) 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
(2) 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 end product.
Domestic end product means--
(1) An unmanufactured end product mined or produced in the
United States; or
(2) An end product manufactured in the United States, if 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 as those that
the agency determines are not mined, produced, or manufactured in
sufficient and reasonably available commercial quantities of a
satisfactory quality are treated as domestic. Scrap generated,
collected, and prepared for processing in the United States is
considered domestic.
End product means supplies delivered under a line item of a
Government contract.
Foreign end product means an end product other than a domestic
end product.
Israeli end product means an article that--
(1) Is wholly the growth, product, or manufacture of Israel; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in Israel into a new and different article of commerce
with a name, character, or use distinct from that of the article or
articles from which it was transformed.
North American Free Trade Agreement country means Canada or
Mexico.
North American Free Trade Agreement country end product means an
article that--
(1) Is wholly the growth, product, or manufacture of a North
American Free Trade Agreement (NAFTA) country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in a NAFTA country into a new and different article of
commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term refers
to a product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services (except transportation services) incidental to the article,
provided that the value of those incidental services does not exceed
that of the article itself.
United States means the 50 States and the District of Columbia,
U.S. territories and possessions, Puerto Rico, the Northern Mariana
Islands, and any other place subject to U.S. jurisdiction, but does
not include leased bases.
(b) Components of foreign origin. Offerors may obtain from the
Contracting Officer a list of foreign articles that the Contracting
Officer will treat as domestic for this contract.
(c) Implementation. This clause implements the Buy American Act
(41 U.S.C. 10a-10d), the North American Free Trade Agreement
Implementation Act (NAFTA) (19 U.S.C. 3301 note), the Israeli Free
Trade Area Implementation Act of 1985 (Israeli Trade Act) (19 U.S.C.
2112 note), and the Balance of Payments Program by providing a
preference for domestic end products, except for certain foreign end
products that are NAFTA country end products or Israeli end
products.
(d) Delivery of end products. The Contracting Officer has
determined that NAFTA and the Israeli Trade Act apply to this
acquisition. Unless otherwise specified, these trade agreements
apply to all items in the Schedule. The Contractor shall deliver
under this contract only domestic end products except to the extent
that, in its offer, it specified delivery of foreign end products in
the provision entitled ``Buy American Act--North American Free Trade
Agreement--Israeli Trade Act--Balance of Payments Program
Certificate.'' If the Contractor specified in its offer that the
Contractor would supply a NAFTA country end product or an Israeli
end product, then the Contractor shall supply a NAFTA country end
product, an Israeli end product or, at the Contractor's option, a
domestic end product.
(End of clause)
Alternate I (Feb 2000). As prescribed in 25.1101(b)(1)(ii), add
the following definition to paragraph (a) of the basic clause, and
substitute the following paragraph (d) for paragraph (d) of the
basic clause:
Canadian end product means an article that--
(1) Is wholly the growth, product, or manufacture of Canada; or
(2) In the case of an article that consists in whole or in part
of materials from another
[[Page 72435]]
country, has been substantially transformed in Canada into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to the article, provided that the value of those
incidental services does not exceed that of the article itself.
(d) Delivery of end products. The Contracting Officer has
determined that NAFTA applies to this acquisition. Unless otherwise
specified, NAFTA applies to all items in the Schedule. The
Contractor shall deliver under this contract only domestic end
products except to the extent that, in its offer, it specified
delivery of foreign end products in the provision entitled ``Buy
American Act--North American Free Trade Agreement--Israeli Trade
Act--Balance of Payment Program Certificate.'' If the Contractor
specified in its offer that the Contractor would supply a Canadian
end product, then the Contractor shall supply a Canadian end product
or, at the Contractor's option, a domestic end product.
Alternate II (Feb 2000). As prescribed in 25.1101(b)(1)(iii),
add the following definition to paragraph (a) of the basic clause,
and substitute the following paragraph (d) for paragraph (d) of the
basic clause:
Canadian end product means an article that--
(1) Is wholly the growth, product, or manufacture of Canada; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in Canada into a new and different article of commerce
with a name, character, or use distinct from that of the article or
articles from which it was transformed. The term refers to a product
offered for purchase under a supply contract, but for purposes of
calculating the value of the end product includes services (except
transportation services) incidental to the article, provided that
the value of those incidental services does not exceed that of the
article itself.
(d) Delivery of end products. The Contracting Officer has
determined that NAFTA and the Israeli Trade Act apply to this
acquisition. Unless otherwise specified, these trade agreements
apply to all items in the Schedule. The Contractor shall deliver
under this contract only domestic end products except to the extent
that, in its offer, it specified delivery of foreign end products in
the provision entitled ``Buy American Act--North American Free Trade
Agreement--Israeli Trade Act--Balance of Payment Program
Certificate.'' If the Contractor specified in its offer that the
Contractor would supply a Canadian end product or an Israeli end
product, then the Contractor shall supply a Canadian end product, an
Israeli end product or, at the Contractor's option, a domestic end
product.
52.225-4 Buy American Act North American Free Trade Agreement--Israeli
Trade Act--Balance of Payments Program Certificate.
As prescribed in 25.1101(b)(2)(i), insert the following provision:
Buy American Act North American Free Trade Agreement--Israeli Trade
Act--Balance of Payments Program Certificate (Feb 2000)
(a) The offeror certifies that each end product, except those
listed in paragraph (b) or (c) of this provision, is a domestic end
product (as defined in the clause of this solicitation entitled
``Buy American Act--North American Free Trade Agreement--Israeli
Trade Act--Balance of Payments Program'') and that the offeror has
considered components of unknown origin to have been mined,
produced, or manufactured outside the United States.
(b) The offeror certifies that the following supplies are NAFTA
country end products or Israeli end products as defined in the
clause of this solicitation entitled ``Buy American Act--North
American Free Trade Agreement--Israeli Trade Act--Balance of
Payments Program'':
NAFTA Country or Israeli End Products:
Line Item No.----------------------------------------------------------
Country of Origin------------------------------------------------------
(List as necessary)
(c) The offeror shall list those supplies that are foreign end
products (other than those listed in paragraph (b) of this
provision) as defined in the clause of this solicitation entitled
``Buy American Act--North American Free Trade Agreement--Israeli
Trade Act--Balance of Payments Program.'' The offeror shall list as
other foreign end products those end products manufactured in the
United States that do not qualify as domestic end products.
Other Foreign End Products
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
(List as necessary)
(d) The Government will evaluate offers in accordance with the
policies and procedures of Part 25 of the Federal Acquisition
Regulation.
(End of provision)
Alternate I (Feb 2000). As prescribed in 25.1101(b)(2)(ii),
substitute the following paragraph (b) for paragraph (b) of the
basic provision:
(b) The offeror certifies that the following supplies are
Canadian end products as defined in the clause of this solicitation
entitled ``Buy American Act--North American Free Trade Agreement--
Israeli Trade Act--Balance of Payments Program'':
Canadian End Products:
Line Item No.----------------------------------------------------------
(List as necessary)
Alternate II (Feb 2000). As prescribed in 25.1101(b)(2)(iii),
substitute the following paragraph (b) for paragraph (b) of the
basic provision:
(b) The offeror certifies that the following supplies are
Canadian end products or Israeli end products as defined in the
clause of this solicitation entitled ``Buy American Act--North
American Free Trade Agreement--Israeli Trade Act--Balance of
Payments Program'':
Canadian or Israeli End Products
Line Item No.:---------------------------------------------------------
Country of Origin:-----------------------------------------------------
List as necessary)
52.225-5 Trade Agreements.
As prescribed in 25.1101(c)(1), insert the following clause:
Trade Agreements (Feb 2000)
(a) Definitions. As used in this clause.
Caribbean Basin country means any of the following countries:
Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British
Virgin Islands, Costa Rica, Dominica, Dominican Republic, El
Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica,
Montserrat, Netherlands Antilles, Nicaragua, Panama, St. Kitts and
Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and
Tobago.
Caribbean Basin country end product means an article that--
(1) Is wholly the growth, product, or manufacture of a Caribbean
Basin country; or
(2) In the case of an article 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
article of commerce with a name, character, or use distinct from
that of the article or articles from which it was transformed. The
term refers to a product offered for purchase under a supply
contract, but for purposes of calculating the value of the end
product includes services (except transportation services)
incidental to the article, provided that the value of those
incidental services does not exceed that of the article itself. The
term excludes products that are excluded from duty-free treatment
for Caribbean countries under 19 U.S.C. 2703(b), which presently
are--
(i) Textiles and apparel articles that are subject to textile
agreements;
(ii) Footwear, handbags, luggage, flat goods, work gloves, and
leather wearing apparel not designated as eligible articles for the
purpose of the Generalized System of Preferences under Title V of
the Trade Act of 1974;
(iii) Tuna, prepared or preserved in any manner in airtight
containers;
(iv) Petroleum, or any product derived from petroleum; and
(v) Watches and watch parts (including cases, bracelets, and
straps) of whatever type including, but not limited to, mechanical,
quartz digital, or quartz analog, if such watches or watch parts
contain any material that is the product of any country to which the
Harmonized Tariff Schedule of the United States (HTSUS) column 2
rates of duty apply.
Designated country means any of the following countries:
Aruba, Austria, Bangladesh Belgium, Benin, Bhutan, Botswana,
Burkina Faso, Burundi, Canada, Cape Verde, Central African Republic,
Chad, Comoros, Denmark, Djibouti, Equatorial Guinea.
[[Page 72436]]
Finland, France, Gambia, Germany, Greece, Guinea, Guinea-Bissau,
Haiti, Hong Kong, Ireland, Israel, Italy, Japan.
Kiribati, Korea, Republic of Lesotho, Liechtenstein, Luxembourg,
Malawi, Maldives, Mali, Mozambique, Nepal, Netherlands, Niger,
Norway, Portugal, Rwanda.
Sao Tome and Principe, Sierra Leone, Singapore, Somalia, Spain,
Sweden, Switzerland, Tanzania U.R., Togo, Tuvalu, Uganda, United
Kingdom, Vanuatu, Western Samoa, Yemen.
Designated country end product means an article that--
(1) Is wholly the growth, product, or manufacture of a
designated country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in a designated country into a new and different article
of commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term refers
to a product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services, (except transportation services) incidental to the
article, provided that the value of those incidental services does
not exceed that of the article itself.
End product means supplies delivered under a line item of a
Government contract.
North American Free Trade Agreement country means Canada or
Mexico.
North American Free Trade Agreement country end product means an
article that--
(1) Is wholly the growth, product, or manufacture of a North
American Free Trade Agreement (NAFTA) country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in a NAFTA country into a new and different article of
commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term refers
to a product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services, (except transportation services) incidental to the
article, provided that the value of those incidental services does
not exceed that of the article itself.
United States means the 50 States and the District of Columbia,
U.S. territories and possessions, Puerto Rico, the Northern Mariana
Islands, and any other place subject to U.S. jurisdiction, but does
not include leased bases.
U.S.-made end product means an article that is mined, produced,
or manufactured in the United States or that is substantially
transformed in the United States into a new and different article of
commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed.,
(b) Implementation. This clause implements the Trade, Agreements
Act (19 U.S.C. 2501, et seq.) and the North American Free Trade
Agreement Implementation Act of 1993, (NAFTA) (19 U.S.C. 3301 note),
by restricting the acquisition of end products that are not U.S.-
made, designated country, Caribbean Basin country, or NAFTA country
end products.,
(c) Delivery of end products. The Contracting Officer has
determined that the Trade Agreements Act and NAFTA apply to this
acquisition. Unless otherwise specified, these trade agreements
apply to all items in the Schedule. The Contractor shall deliver
under this contract only U.S.-made, designated country, Caribbean
Basin country, or NAFTA country end products except to the extent
that, in its offer, it specified delivery of other end products in
the provision entitled ``Trade Agreements Certificate.''
(End of clause)
52.225-6 Trade Agreements Certificate.
As prescribed in 25.1101(c)(2), insert the following provision:
Trade Agreements Certificate (Feb 2000)
(a) The offeror certifies that each end product, except those
listed in paragraph (b) of this provision, is a U.S.-made,
designated country, Caribbean Basin country, or NAFTA country end
product, as defined in the clause of this solicitation entitled
``Trade Agreements.''
(b) The offeror shall list as other end products those supplies
that are not U.S.-made, designated country, Caribbean Basin country,
or NAFTA country end products.
Other End Products
Line Item No.:
Country of Origin:-----------------------------------------------------
(List as necessary),
(c) The Government will evaluate offers in accordance with the
policies and procedures of Part 25 of the Federal Acquisition
Regulation. For line items subject to the Trade Agreements Act, the
Government will evaluate offers of U.S.-made, designated country,
Caribbean Basin country, or NAFTA country end products without
regard to the restrictions of the Buy American Act or the Balance of
Payments Program. The, Government will consider for award only
offers of U.S.-made, designated country, Caribbean Basin country, or
NAFTA country end products unless the Contracting Officer determines
that there are no offers for such products or that the offers for
such products are insufficient to fulfill the requirements of this
solicitation.
(End of provision)
52.225-7 Waiver of Buy American Act for Civil Aircraft and Related
Articles.
As prescribed in 25.1101(d), insert the following provision:
Waiver of Buy American Act for Civil Aircraft and Related Articles (Feb
2000)
(a) Definition. Civil aircraft and related articles, as used in
this provision, means--
(1) All aircraft other than aircraft to be purchased for use by
the Department of Defense or the U.S. Coast Guard;
(2) The engines (and parts and components for incorporation into
the engines) of these aircraft;
(3) Any other parts, components, and subassemblies for
incorporation into the aircraft; and
(4) Any ground flight simulators, and parts and components of
these simulators, for use with respect to the aircraft, whether to
be used as original or replacement equipment in the manufacture,
repair, maintenance, rebuilding, modification, or conversion of the
aircraft, and without regard to whether the aircraft or articles
receive duty-free treatment under section 601(a)(2) of the Trade
Agreements Act.
(b) The U.S. Trade Representative has waived the Buy American
Act for acquisitions of civil aircraft and related articles from
countries that are parties to the Agreement on Trade in Civil
Aircraft. Those countries are Austria, Belgium, Bulgaria, Canada,
Denmark, Egypt, Finland, France, Germany, Greece, Ireland, Italy,
Japan, Luxembourg, Macao, the Netherlands, Norway, Portugal,
Romania, Spain, Sweden, Switzerland, and the United Kingdom.
(c) For the purpose of this waiver, an article is a product of a
country only if--
(1) It is wholly the growth, product, or manufacture of that
country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, it has been substantially
transformed into a new and different article of commerce with a
name, character, or use distinct from that of the article or
articles from which it was transformed.
(d) The waiver is subject to modification or withdrawal by the
U.S. Trade Representative.
(End of provision)
52.225-8 Duty-Free Entry.
As prescribed in 25.1101(e), insert the following clause:
Duty-Free Entry (Feb 2000)
(a) Definition. Customs territory of the United States means the
States, the District of Columbia, and Puerto Rico.
(b) Except as otherwise approved by the Contracting Officer, the
Contractor shall not include in the contract price any amount for
duties on supplies specifically identified in the Schedule to be
accorded duty-free entry.
(c) Except as provided in paragraph (d) of this clause or
elsewhere in this contract, the following procedures apply to
supplies not identified in the Schedule to be accorded duty-free
entry:
(1) The Contractor shall notify the Contracting Officer in
writing of any purchase of foreign supplies (including, without
limitation, raw materials, components, and intermediate assemblies)
in excess of $10,000 that are to be imported into the customs
territory of the United States for delivery to the Government under
this contract, either as end products or for incorporation into end
products. The Contractor shall furnish the notice to the Contracting
Officer at least 20 calendar days before the importation. The notice
shall identify the--
(i) Foreign supplies;
(ii) Estimated amount of duty; and
(iii) Country of origin.
(2) The Contracting Officer will determine whether any of these
supplies should be accorded duty-free entry and will notify the
Contractor within 10 calendar days after receipt of the Contractor's
notification.
[[Page 72437]]
(3) Except as otherwise approved by the Contracting Officer, the
contract price shall be reduced by (or the allowable cost shall not
include) the amount of duty that would be payable if the supplies
were not entered duty-free.
(d) The Contractor is not required to provide the notification
under paragraph (c) of this clause for purchases of foreign supplies
if--
(1) The supplies are identical in nature to items purchased by
the Contractor or any subcontractor in connection with its
commercial business; and
(2) Segregation of these supplies to ensure use only on
Government contracts containing duty-free entry provisions is not
economical or feasible.
(e) The Contractor shall claim duty-free entry only for supplies
to be delivered to the Government under this contract, either as end
products or incorporated into end products, and shall pay duty on
supplies, or any portion of them, other than scrap, salvage, or
competitive sale authorized by the Contracting Officer, diverted to
nongovernmental use.
(f) The Government will execute any required duty-free entry
certificates for supplies to be accorded duty-free entry and will
assist the Contractor in obtaining duty-free entry for these
supplies.
(g) Shipping documents for supplies to be accorded duty-free
entry shall consign the shipments to the contracting agency in care
of the Contractor and shall include the--
(1) Delivery address of the Contractor (or contracting agency,
if appropriate);
(2) Government prime contract number;
(3) Identification of carrier;
(4) Notation ``UNITED STATES GOVERNMENT, ______ [agency], ______
Duty-free entry to be claimed pursuant to Item No(s) ______ [from
Tariff Schedules] ______, Harmonized Tariff Schedules of the United
States. Upon arrival of shipment at port of entry, District Director
of Customs, please release shipment under 19 CFR part 142 and notify
[cognizant contract administration office] for execution of Customs
Forms 7501 and 7501-A and any required duty-free entry
certificates.'';
(5) Gross weight in pounds (if freight is based on space
tonnage, state cubic feet in addition to gross shipping weight); and
(6) Estimated value in United States dollars.
(h) The Contractor shall instruct the foreign supplier to--
(1) Consign the shipment as specified in paragraph (g) of this
clause;
(2) Mark all packages with the words ``UNITED STATES
GOVERNMENT'' and the title of the contracting agency; and
(3) Include with the shipment at least two copies of the bill of
lading (or other shipping document) for use by the District Director
of Customs at the port of entry.
(i) The Contractor shall provide written notice to the cognizant
contract administration office immediately after notification by the
Contracting Officer that duty-free entry will be accorded foreign
supplies or, for duty-free supplies identified in the Schedule, upon
award by the Contractor to the overseas supplier. The notice shall
identify the--
(1) Foreign supplies;
(2) Country of origin;
(3) Contract number; and
(4) Scheduled delivery date(s).
(j) The Contractor shall include the substance of this clause in
any subcontract if--
(1) Supplies identified in the Schedule to be accorded duty-free
entry will be imported into the customs territory of the United
States; or
(2) Other foreign supplies in excess of $10,000 may be imported
into the customs territory of the United States.
(End of clause)
52.225-9 Buy American Act--Balance of Payments Program--Construction
Materials.
As prescribed in 25.1102(a), insert the following clause:
Buy American Act--Balance of Payments Program--Construction Materials
(Feb 2000)
(a) Definitions. As used in this clause--
Component means any article, material, or supply incorporated
directly into construction materials.
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--
(1) 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
(2) 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 end product.
Domestic construction material means--
(1) An unmanufactured construction material mined or produced in
the United States; or
(2) A construction material manufactured in the United States,
if 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.
Foreign construction material means a construction material
other than a domestic construction material.
United States means the 50 States and the District of Columbia,
U.S. territories and possessions, Puerto Rico, the Northern Mariana
Islands, and any other place subject to U.S. jurisdiction, but does
not include leased bases.
(b) Domestic preference. (1) This clause implements the Buy
American Act (41 U.S.C. 10a-10d) and the Balance of Payments Program
by providing a preference for domestic construction material. The
Contractor shall use only domestic construction material in
performing this contract, except as provided in paragraphs (b)(2)
and (b)(3) of this clause.
(2) This requirement does not apply to the construction material
or components listed by the Government as follows: ______
[Contracting Officer to list applicable excepted materials or
indicate ``none'']
(3) The Contracting Officer may add other foreign construction
material to the list in paragraph (b)(2) of this clause if the
Government determines that
(i) The cost of domestic construction material would be
unreasonable. The cost of a particular domestic construction
material subject to the requirements of the Buy American Act is
unreasonable when the cost of such material exceeds the cost of
foreign material by more than 6 percent. For determination of
unreasonable cost under the Balance of Payments Program, the
Contracting Officer will use a factor of 50 percent;
(ii) The application of the restriction of the Buy American Act
or Balance of Payments Program to a particular construction material
would be impracticable or inconsistent with the public interest; or
(iii) The construction material is not mined, produced, or
manufactured in the United States in sufficient and reasonably
available commercial quantities of a satisfactory quality.
(c) Request for determination of inapplicability of the Buy
American Act or Balance of Payments Program. (1)(i) Any Contractor
request to use foreign construction material in accordance with
paragraph (b)(3) of this clause shall include adequate information
for Government evaluation of the request, including--
(A) A description of the foreign and domestic construction
materials;
(B) Unit of measure;
(C) Quantity;
(D) Price;
(E) Time of delivery or availability;
(F) Location of the construction project;
(G) Name and address of the proposed supplier; and
(H) A detailed justification of the reason for use of foreign
construction materials cited in accordance with paragraph (b)(3) of
this clause.
(ii) A request based on unreasonable cost shall include a
reasonable survey of the market and a completed price comparison
table in the format in paragraph (d) of this clause.
(iii) The price of construction material shall include all
delivery costs to the
[[Page 72438]]
construction site and any applicable duty (whether or not a duty-
free certificate may be issued).
(iv) Any Contractor request for a determination submitted after
contract award shall explain why the Contractor could not reasonably
foresee the need for such determination and could not have requested
the determination before contract award. If the Contractor does not
submit a satisfactory explanation, the Contracting Officer need not
make a determination.
(2) If the Government determines after contract award that an
exception to the Buy American Act or Balance of Payments Program
applies and the Contracting Officer and the Contractor negotiate
adequate consideration, the Contracting Officer will modify the
contract to allow use of the foreign construction material. However,
when the basis for the exception is the unreasonable price of a
domestic construction material, adequate consideration is not less
than the differential established in paragraph (b)(3)(i) of this
clause.
(3) Unless the Government determines that an exception to the
Buy American Act or Balance of Payments Program applies, use of
foreign construction material is noncompliant with the Buy American
Act or Balance of Payments Program.
(d) Data. To permit evaluation of requests under paragraph (c)
of this clause based on unreasonable cost, the Contractor shall
include the following information and any applicable supporting data
based on the survey of suppliers:
Foreign and Domestic Construction Materials Price Comparison
----------------------------------------------------------------------------------------------------------------
Construction material description Unit of measure Quantity Price (dollars) \1\
----------------------------------------------------------------------------------------------------------------
Item 1
Foreign construction material.... ....................... ....................... .......................
Domestic construction material... ....................... ....................... .......................
Item 2
Foreign construction material.... ....................... ....................... .......................
Domestic construction material... ....................... ....................... .......................
----------------------------------------------------------------------------------------------------------------
Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free entry
certificate is issued).
List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral,
attach summary.
Include other applicable supporting information.
(End of clause)
52.225-10 Notice of Buy American Act/Balance of Payments Program
Requirement--Construction Materials.
As prescribed in 25.1102(b)(1), insert the following provision:
Notice of Buy American Act/Balance of Payments Program Requirement--
Construction Materials (Feb 2000)
(a) Definitions. Construction material, domestic construction
material, and foreign construction material, as used in this
provision, are defined in the clause of this solicitation entitled
``Buy American Act--Balance of Payments Program--Construction
Materials'' (Federal Acquisition Regulation (FAR) clause 52.225-9).
(b) Requests for determinations of inapplicability. An offeror
requesting a determination regarding the inapplicability of the Buy
American Act or Balance of Payments Program should submit the
request to the Contracting Officer in time to allow a determination
before submission of offers. The offeror shall include the
information and applicable supporting data required by paragraphs
(c) and (d) of the clause at FAR 52.225-9 in the request. If an
offeror has not requested a determination regarding the
inapplicability of the Buy American Act or Balance of Payments
Program before submitting its offer, or has not received a response
to a previous request, the offeror shall include the information and
supporting data in the offer.
(c) Evaluation of offers. (1) The Government will evaluate an
offer requesting exception to the requirements of the Buy American
Act or Balance of Payments Program, based on claimed unreasonable
cost of domestic construction material, by adding to the offered
price the appropriate percentage of the cost of such foreign
construction material, as specified in paragraph (b)(3)(i) of the
clause at FAR 52.225-9.
(2) If evaluation results in a tie between an offeror that
requested the substitution of foreign construction material based on
unreasonable cost and an offeror that did not request an exception,
the Contracting Officer will award to the offeror that did not
request an exception based on unreasonable cost.
(d) Alternate offers. (1) When an offer includes foreign
construction material not listed by the Government in this
solicitation in paragraph (b)(2) of the clause at FAR 52.225-9, the
offeror also may submit an alternate offer based on use of
equivalent domestic construction material.
(2) If an alternate offer is submitted, the offeror shall submit
a separate Standard Form 1442 for the alternate offer, and a
separate price comparison table prepared in accordance with
paragraphs (c) and (d) of the clause at FAR 52.225-9 for the offer
that is based on the use of any foreign construction material for
which the Government has not yet determined an exception applies.
(3) If the Government determines that a particular exception
requested in accordance with paragraph (c) of the clause at FAR
52.225-9 does not apply, the Government will evaluate only those
offers based on use of the equivalent domestic construction
material, and the offeror shall be required to furnish such domestic
construction material. An offer based on use of the foreign
construction material for which an exception was requested--
(i) Will be rejected as nonresponsive if this acquisition is
conducted by sealed bidding; or
(ii) May be accepted if revised during negotiations.
(End of provision)
Alternate I (Feb 2000). As prescribed in 25.1102(b)(2),
substitute the following paragraph (b) for paragraph (b) of the
basic provision:
(b) Requests for determinations of inapplicability. An offeror
requesting a determination regarding the inapplicability of the Buy
American Act or Balance of Payments Program shall submit the request
with its offer, including the information and applicable supporting
data required by paragraphs (c) and (d) of the clause at FAR 52.225-
9.
52.225-11 Buy American Act--Balance of Payments Program--Construction
Materials under Trade Agreements.
As prescribed in 25.1102(c)(1), insert the following clause:
Buy American Act--Balance of Payments Program--Construction Materials
Under Trade Agreements (Feb 2000)
(a) Definitions. As used in this clause--
Component means any article, material, or supply incorporated
directly into construction materials.
Construction material means an article, material, or supply
brought to the construction site by the Contractor or subcontractor
for incorporation into the building or work. The term also includes
an
[[Page 72439]]
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--
(1) 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
(2) 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 end product.
Designated country means any of the following countries: Aruba,
Austria, Bangladesh, Belgium, Benin, Bhutan, Botswana, Burkina Faso,
Burundi, Canada, Cape Verde, Central African Republic, Chad,
Comoros, Denmark.
Djibouti, Equatorial Guinea, Finland, France, Gambia, Germany,
Greece, Guinea, Guinea-Bissau, Haiti, Hong Kong, Ireland, Israel,
Italy, Japan.
Kiribati, Korea, Republic of, Lesotho, Liechtenstein,
Luxembourg, Malawi, Maldives, Mali, Mozambique, Nepal, Netherlands,
Niger, Norway, Portugal, Rwanda.
Sao Tome and Principe, Sierra Leone, Singapore, Somalia, Spain,
Sweden, Switzerland, Tanzania U.R., Togo, Tuvalu, Uganda, United
Kingdom, Vanuatu, Western Samoa, Yemen.
Designated country construction material means a construction
material that--
(1) Is wholly the growth, product, or manufacture of a
designated country; or
(2) 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 designated country into a new and
different construction material distinct from the materials from
which it was transformed.
Domestic construction material means--
(1) An unmanufactured construction material mined or produced in
the United States; or
(2) A construction material manufactured in the United States,
if 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.
Foreign construction material means a construction material
other than a domestic construction material.
North American Free Trade Agreement country means Canada or
Mexico.
North American Free Trade Agreement country construction
material means a construction material that--
(1) Is wholly the growth, product, or manufacture of a North
American Free Trade Agreement (NAFTA) country; or
(2) 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 NAFTA country into a new and
different construction material distinct from the materials from
which it was transformed.
United States means the 50 States and the District of Columbia,
U.S. territories and possessions, Puerto Rico, the Northern Mariana
Islands, and any other place subject to U.S. jurisdiction, but does
not include leased bases.
(b) Construction materials. (1) This clause implements the Buy
American Act (41 U.S.C. 10a-10d) and the Balance of Payments Program
by providing a preference for domestic construction material. In
addition, the Contracting Officer has determined that the Trade
Agreements Act and the North American Free Trade Agreement (NAFTA)
apply to this acquisition. Therefore, the Buy American Act and
Balance of Payments Program restrictions are waived for designated
country and NAFTA country construction materials.
(2) The Contractor shall use only domestic, designated country,
or NAFTA country construction material in performing this contract,
except as provided in paragraphs (b)(3) and (b)(4) of this clause.
(3) The requirement in paragraph (b)(2) of this clause does not
apply to the construction materials or components listed by the
Government as follows:______
[Contracting Officer to list applicable excepted materials or
indicate ``none'']
(4) The Contracting Officer may add other foreign construction
material to the list in paragraph (b)(3) of this clause if the
Government determines that--
(i) The cost of domestic construction material would be
unreasonable. The cost of a particular domestic construction
material subject to the restrictions of the Buy American Act is
unreasonable when the cost of such material exceeds the cost of
foreign material by more than 6 percent. For determination of
unreasonable cost under the Balance of Payments Program, the
Contracting Officer will use a factor of 50 percent;
(ii) The application of the restriction of the Buy American Act
or Balance of Payments Program to a particular construction material
would be impracticable or inconsistent with the public interest; or
(iii) The construction material is not mined, produced, or
manufactured in the United States in sufficient and reasonably
available commercial quantities of a satisfactory quality.
(c) Request for determination of inapplicability of the Buy
American Act or Balance of Payments Program. (1)(i) Any Contractor
request to use foreign construction material in accordance with
paragraph (b)(4) of this clause shall include adequate information
for Government evaluation of the request, including--
(A) A description of the foreign and domestic construction
materials;
(B) Unit of measure;
(C) Quantity;
(D) Price;
(E) Time of delivery or availability;
(F) Location of the construction project;
(G) Name and address of the proposed supplier; and
(H) A detailed justification of the reason for use of foreign
construction materials cited in accordance with paragraph (b)(3) of
this clause.
(ii) A request based on unreasonable cost shall include a
reasonable survey of the market and a completed price comparison
table in the format in paragraph (d) of this clause.
(iii) The price of construction material shall include all
delivery costs to the construction site and any applicable duty
(whether or not a duty-free certificate may be issued).
(iv) Any Contractor request for a determination submitted after
contract award shall explain why the Contractor could not reasonably
foresee the need for such determination and could not have requested
the determination before contract award. If the Contractor does not
submit a satisfactory explanation, the Contracting Officer need not
make a determination.
(2) If the Government determines after contract award that an
exception to the Buy American Act or Balance of Payments Program
applies and the Contracting Officer and the Contractor negotiate
adequate consideration, the Contracting Officer will modify the
contract to allow use of the foreign construction material. However,
when the basis for the exception is the unreasonable price of a
domestic construction material, adequate consideration is not less
than the differential established in paragraph (b)(4)(i) of this
clause.
(3) Unless the Government determines that an exception to the
Buy American Act or Balance of Payments Program applies, use of
foreign construction material is noncompliant with the Buy American
Act or Balance of Payments Program.
(d) Data. To permit evaluation of requests under paragraph (c)
of this clause based on unreasonable cost, the Contractor shall
include the following information and any applicable supporting data
based on the survey of suppliers:
[[Page 72440]]
Foreign and Domestic Construction Materials Price Comparison
----------------------------------------------------------------------------------------------------------------
Construction material description Unit of measure Quantity Price (dollars) \1\
----------------------------------------------------------------------------------------------------------------
Item 1:
Foreign construction material.... ....................... ....................... .......................
Domestic construction material... ....................... ....................... .......................
Item 2:
Foreign construction material.... ....................... ....................... .......................
Domestic construction material... ....................... ....................... .......................
----------------------------------------------------------------------------------------------------------------
\1\ Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free
entry certificate is issued).
List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral,
attach summary.
Include other applicable supporting information.
(End of clause)
Alternate I (Feb 2000). As prescribed in 25.1102(c)(3),
substitute the following paragraphs (b)(1) and (b)(2) for paragraphs
(b)(1) and (b)(2) of the basic clause:
(b) Construction materials. (1) This clause implements the Buy
American Act (41 U.S.C. 10a-10d) and the Balance of Payments Program
by providing a preference for domestic construction material. In
addition, the Contracting Officer has determined that the North
American Free Trade Agreement (NAFTA) applies to this acquisition.
Therefore, the Buy American Act and Balance of Payments Program
restrictions are waived for NAFTA country construction materials.
(2) The Contractor shall use only domestic or NAFTA country
construction material in performing this contract, except as
provided in paragraphs (b)(3) and (b)(4) of this clause.
52.225-12 Notice of Buy American Act/Balance of Payments Program
Requirement--Construction Materials Under Trade Agreements.
As prescribed in 25.1102(d)(1), insert the following provision:
Notice of Buy American Act/Balance of Payments Program Requirement--
Construction Materials Under Trade Agreements (Feb 2000)
(a) Definitions. Construction material, designated country
construction material, domestic construction material, foreign
construction material, and NAFTA country construction material, as
used in this provision, are defined in the clause of this
solicitation entitled ``Buy American Act--Balance of Payments
Program--Construction Materials under Trade Agreements'' (Federal
Acquisition Regulation (FAR) clause 52.225-11).
(b) Requests for determination of inapplicability. An offeror
requesting a determination regarding the inapplicability of the Buy
American Act or Balance of Payments Program should submit the
request to the Contracting Officer in time to allow a determination
before submission of offers. The offeror shall include the
information and applicable supporting data required by paragraphs
(c) and (d) of FAR clause 52.225-11 in the request. If an offeror
has not requested a determination regarding the inapplicability of
the Buy American Act or Balance of Payments Program before
submitting its offer, or has not received a response to a previous
request, the offeror shall include the information and supporting
data in the offer.
(c) Evaluation of offers. (1) The Government will evaluate an
offer requesting exception to the requirements of the Buy American
Act or Balance of Payments Program, based on claimed unreasonable
cost of domestic construction materials, by adding to the offered
price the appropriate percentage of the cost of such foreign
construction material, as specified in paragraph (b)(4)(i) of FAR
clause 52.225-11.
(2) If evaluation results in a tie between an offeror that
requested the substitution of foreign construction material based on
unreasonable cost and an offeror that did not request an exception,
the Contracting Officer will award to the offeror that did not
request an exception based on unreasonable cost.
(d) Alternate offers. (1) When an offer includes foreign
construction material, other than designated country or NAFTA
country construction material, that is not listed by the Government
in this solicitation in paragraph (b)(3) of FAR clause 52.225-11,
the offeror also may submit an alternate offer based on use of
equivalent domestic, designated country, or NAFTA country
construction material.
(2) If an alternate offer is submitted, the offeror shall submit
a separate Standard Form 1442 for the alternate offer, and a
separate price comparison table prepared in accordance with
paragraphs (c) and (d) of FAR clause 52.225-11 for the offer that is
based on the use of any foreign construction material for which the
Government has not yet determined an exception applies.
(3) If the Government determines that a particular exception
requested in accordance with paragraph (c) of FAR clause 52.225-11
does not apply, the Government will evaluate only those offers based
on use of the equivalent domestic, designated country, or NAFTA
country construction material, and the offeror shall be required to
furnish such domestic, designated country, or NAFTA country
construction material. An offer based on use of the foreign
construction material for which an exception was requested--
(i) Will be rejected as nonresponsive if this acquisition is
conducted by sealed bidding; or
(ii) May be accepted if revised during negotiations.
(End of provision)
Alternate I (Feb 2000). As prescribed in 25.1102(d)(2),
substitute the following paragraph (b) for paragraph (b) of the
basic provision:
(b) Requests for determination of inapplicability. An offeror
requesting a determination regarding the inapplicability of the Buy
American Act or Balance of Payments Program shall submit the request
with its offer, including the information and applicable supporting
data required by paragraphs (c) and (d) of FAR clause 52.225-11.
52.225-13 Restrictions on Certain Foreign Purchases.
As prescribed in 25.1103(a), insert the following clause:
Restrictions on Certain Foreign Purchases (Feb 2000)
(a) The Contractor shall not acquire, for use in the performance
of this contract, any supplies or services originating from sources
within, or that were located in or transported from or through,
countries whose products are banned from importation into the United
States under regulations of the Office of Foreign Assets Control,
Department of the Treasury. Those countries are Cuba, Iran, Iraq,
Libya, North Korea, and Sudan.
(b) The Contractor shall not acquire for use in the performance
of this contract any supplies or services from entities controlled
by the government of Iraq.
(c) The Contractor shall insert this clause, including this
paragraph (c), in all subcontracts.
(End of clause)
52.225-14 Inconsistency between English Version and Translation of
Contract.
As prescribed in 25.1103(b), insert the following clause:
Inconsistency Between English Version and Translation of Contract (Feb
2000)
In the event of inconsistency between any terms of this contract
and any translation into another language, the English language
meaning shall control.
(End of clause)
52.225-15 Sanctioned European Union Country End Products.
As prescribed in 25.1103(c), insert the following clause:
Sanctioned European Union Country End Products (Feb 2000)
(a) Definitions. As used in this clause--
Sanctioned European Union country end product means an article
that--
[[Page 72441]]
(1) Is wholly the growth, product, or manufacture of a
sanctioned European Union (EU) member state; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in a sanctioned EU member state into a new and different
article of commerce with a name, character, or use distinct from
that of the article or articles from which it was transformed. The
term refers to a product offered for purchase under a supply
contract, but for purposes of calculating the value of the end
product includes services (except transportation services)
incidental to the article, provided that the value of those
incidental services does not exceed that of the article itself.
Sanctioned European Union member state means Austria, Belgium,
Denmark, Finland, France, Ireland, Italy, Luxembourg, the
Netherlands, Sweden, or the United Kingdom.
(b) The Contractor shall not deliver any sanctioned European
Union country end products under this contract.
(End of clause)
52.225-16 Sanctioned European Union Country Services.
As prescribed in 25.1103(c), insert the following clause:
Sanctioned European Union Country Services (Feb 2000)
(a) Definition. Sanctioned European Union member state, as used
in this clause, means Austria, Belgium, Denmark, Finland, France,
Ireland, Italy, Luxembourg, the Netherlands, Sweden, or the United
Kingdom.
(b) The Contractor shall not perform services under this
contract in a sanctioned European Union member state. This
prohibition does not apply to subcontracts.
(End of clause)
52.225-17 Evaluation of Foreign Currency Offers.
As prescribed in 25.1103(d), insert the following provision:
Evaluation of Foreign Currency Offers (Feb 2000)
If the Government receives offers in more than one currency, the
Government will evaluate offers by converting the foreign currency
to United States currency using [Contracting Officer to insert
source of rate] in effect as follows:
(a) For acquisitions conducted using sealed bidding procedures,
on the date of bid opening.
(b) For acquisitions conducted using negotiation procedures--
(1) On the date specified for receipt of offers, if award is
based on initial offers; otherwise
(2) On the date specified for receipt of proposal revisions.
(End of provision)
[FR Doc. 99-33431 Filed 12-23-99; 8:45 am]
BILLING CODE 6820-EP-P