[Federal Register Volume 61, Number 68 (Monday, April 8, 1996)]
[Rules and Regulations]
[Pages 15389-15390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8493]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Office of the Secretary

48 CFR Parts 1425 and 1452

RIN 1090-AA55


Department of the Interior Acquisition Regulation; Foreign 
Construction Materials

AGENCY: Office of the Secretary, Interior.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In the interests of streamlining processes and improving 
relationships with contractors, the Department of the Interior (DOI) is 
issuing this final rule which amends 48 CFR Chapter 14 by revising and 
updating the Department of the Interior Acquisition Regulation (DIAR).

EFFECTIVE DATE: May 8, 1996.

FOR FURTHER INFORMATION CONTACT: 
Ms. Mary L. McGarvey at (202) 208-3158, Department of the Interior, 
Office of Acquisition and Property Management, 1849 C. Street N.W. 
(MS5522 MIB), Washington, D.C. 20240.

SUPPLEMENTARY INFORMATION:

A. Background

    Under the auspices of the National Performance Review, a thorough 
review of the DIAR was conducted. The review revealed unnecessary and 
outdated regulations, and some excessively burdensome procedures.
    In the interests of streamlining processes and improving 
relationships with contractors, essential portions of the DIAR are 
being reinvented and retained in 48 CFR, when appropriate. The review 
identified Sections that would remain codified. Specifically, Section 
1425.203 which reflects the use of a 6% differential to evaluate U.S. 
versus foreign construction materials will remain codified. If a U.S. 
material exceeds the cost of the foreign product, then the cost of the 
U.S. material is unreasonable. Cost savings must be passed on to the 
Government in post-award approval to use foreign material. Sections 
1425.205 and 1452.225-70 are the prescription and the clause associated 
with this DOI policy. We changed titles, rewrote language, and 
eliminated redundant FAR material from the Sections. We removed 
Secs. 1425.202 and 1425.204 from 48 CFR Chapter 14 under another final 
rule published in the Federal Register dated 2/13/96.
    This final rule is not expected to 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 
contractors are required to either comply with the Buy American Act or 
seek exceptions. An Initial Regulatory Flexibility Analysis has, 
therefore, not been performed.

Paperwork Reduction Act

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), the Department has received approval for this collection of 
information, with approval number 1090-0018, with the expiration date 
of September 30, 1988. The Paperwork Reduction Act applies because the 
proposed revisions impose additional recordkeeping requirements or 
information collection requirements or collection of information from 
offerors, contractors or members of the public which require the 
approval of the Office of Management and Budget (OMB) under 44 U.S.C. 
3501 et seq. The rule requires contractors proposing to use foreign 
construction materials to submit information on foreign and domestic 
construction materials, as well as a justification for use of foreign 
material. This information will be evaluated by the government in 
determining if a request for a waiver of the Buy American Act should be 
granted.

Annual Reporting Burden

    Public reporting burden for this collection of information is 
estimated to average 1 hour, including examination of all bids received 
to see if foreign materials are proposed and an additional burden of 
applying the differential and comparing costs.
    It is estimated that the information collection would affect 250 
contractors (50 applicable contractors  x  5 average bidders per 
contract). The amount of time required for each respondent to provide 
the required information would not exceed 1 hour, thus 250 burden 
hours.
    Required Determinations: The Department believes that public 
comment is unnecessary because the revised material implements standard 
Government operating procedures. Therefore, in accordance with 5 U.S.C. 
553(b)(B), the Department finds good cause to publish this document as 
a final rule. This rule was not subject to Office of Management and 
Budget

[[Page 15390]]
review under Executive Order 12866. In accordance with the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq), the Department has determined 
that this rule will not have a significant economic impact on a 
substantial number of small entities because minimal requirements are 
being added for small businesses and no protections are being 
withdrawn. The Department has determined that this rule does not 
constitute a major Federal action having a significant impact on the 
human environment under the National Environmental Policy Act of 1969. 
The Department has certified that this rule meets the applicable 
standards provided in Sections 2(a) and 2(b)(2) of Executive Order 
12778.

List of Subjects in 48 CFR Parts 1425 and 1452

    Government procurement, Reporting and recordkeeping requirements.

    Dated: March 15, 1996.
Bonnie Cohen,
Assistant Secretary--Policy, Management and Budget.

    Chapter 14 of Title 48 of the Code of Federal Regulations is 
amended as follows:
    1. The authority citation for 48 CFR parts 1425 and 1452 continues 
to read as follows:

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5 
U.S.C. 301.

    2. 48 CFR part 1425 is revised to read as follows:

PART 1425--FOREIGN ACQUISITION

Supart 1425.2--Buy American Act--Construction Materials

Sec.
1425.203-70  Evaluating offers and price adjustment proposals.
1425.205  Solicitation provision and contract clause.

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5 
U.S.C. 301.

Supart 1425.2--Buy American Act--Construction Materials


Sec. 1425.203-70  Evaluating offers and price adjustment proposals.

    (a) Upon receipt of an offered foreign construction material, the 
CO will conduct a 2 part test to determine, first, if the cost of the 
components made in the U.S. exceeds 50% of the cost for all the 
components; and second, if the item meets the first test, whether the 
item is manufactured in the U.S.
    (b) The cost of U.S. material is unreasonable if it exceeds the 
cost of the foreign construction material by more than 6%. The CO will 
compute the cost of construction material to include all delivery costs 
to the construction site, and any applicable duty (whether or not a 
duty-free entry certificate is issued.) This evaluation will be made 
for each foreign construction material proposed in the offer not 
excepted by the Government either in the solicitation at 48 CFR 
1452.225-70(a) or by subsequent amendment.
    (c) The contractor shall pass to the Government any cost savings 
resulting from post-award approval to use foreign material. The CO may 
approve exceptions based on cost if the contractor can document that it 
used U.S. as well as foreign quotes to calculate the price it offered 
to the Government. If it is shown that the contractor did not obtain 
the quotes before award, the Director, PAM is authorized to disapprove 
requests for exceptions to the use of U.S. material. In case of 
disapproval, the contractor shall use the U.S. material and shall not 
pass on the additional cost of the U.S. material to the Government.
Sec. 1425.205  Solicitation provision and contract clause.
    In addition to using the clauses required in FAR 25.205, the CO 
will insert the clause at 48 CFR 1452.225-70, Use of Foreign 
Construction Materials--Department of the Interior, in solicitations 
and contracts for construction, alteration, or repair inside the U.S. 
If the Government has determined that a U.S. construction material is 
unavailable, it will be listed under paragraph (a) of the clause.
    3. Section 1452.225-70 is revised to read as follows:
Sec. 1425.225-70  Use of Foreign Construction Materials.
    As prescribed in 48 CFR 1425.205, insert the following clause in 
solicitations and contracts for construction, alteration, or repair 
inside the United States:

Use of Foreign Construction Materials--Department of the Interior (APR 
1996)

    (a) The Government has determined that the Buy American Act is 
not applicable to the following construction materials because they 
are not mined, produced, or manufactured in the U.S. in sufficient 
quantities of a satisfactory quality:

(1)--------------------------------------------------------------------

(2)--------------------------------------------------------------------

(3)--------------------------------------------------------------------

    (b) Offers based on the use of foreign construction materials 
other than those listed in (a) above may be acceptable if the 
Government determines that U.S. construction material is not 
available, would be impracticable or constitute unreasonable price. 
Please contract the Contracting Officer with questions or comments 
concerning non-availability or impracticability of U.S. material.
    (c)(1) Offers based upon use of foreign construction material 
for cost savings will be considered reasonable if the cost of each 
foreign construction material, plus 6 percent, is less than the cost 
of comparable U.S. construction material. The Contracting Officer 
will compute the cost of each foreign construction material to 
include all delivery costs to the construction site, and any 
applicable duty (whether or not a duty-free entry certificate is 
issued.) This evaluation will be made for each foreign construction 
material included in the offer but not listed in subparagraph (a) 
above in this clause.
    (2) Any contractor cost savings from post award approved 
substitution of foreign construction material for U.S. construction 
material shall be passed to the Government.
    (d)(1) This offer is based on the use of foreign construction 
material not listed in (a) above. For each foreign item proposed the 
offeror shall furnish the following information for the foreign 
material offered: item description, supplier, unit of measure, 
quantity, unit price, duty (even if a duty free certificate is 
issued), delivery costs, and total price. The offeror shall furnish 
the following information for each U.S. material comparable to the 
foreign material: item description, supplier, unit of measure, 
quantity, unit price, delivery costs and total price.
    (2) If the Government rejects the use of foreign construction 
material listed under paragraph (d)(1) above, the Government will 
evaluate the offer using the offeror's stated price for the 
comparable U.S. construction material, and the offeror shall be 
required to furnish such domestic construction material at the 
originally offered price. In preaward situations, an offer which 
does not state a price for a comparable U.S. construction material 
will be rejected by the Government. In postaward situations an offer 
proposing foreign material which does not state the price for the 
comparable U.S. construction material will be rejected by the 
Government. The contractor shall use comparable U.S. material for 
the project and any additional cost for the use of this U.S. 
material shall be absorbed by the contractor.

(End of clause)

[FR Doc. 96-8493 Filed 4-5-96; 8:45 am]
BILLING CODE 4310-RF-M