[Federal Register Volume 62, Number 51 (Monday, March 17, 1997)]
[Rules and Regulations]
[Pages 12698-12702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6315]



[[Page 12698]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 90-46; FAR Case 91-119; Item VI]
RIN 9000-AG81


Federal Acquisition Regulation; Buy American Act--Construction 
(Grimberg Decision)

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on a final rule amending 
the Federal Acquisition Regulation (FAR) to add guidance on pre-award 
and post-award exceptions to the Buy American Act for construction, and 
also to provide guidance regarding instances of noncompliance with the 
Buy American Act. This regulatory action was not subject to Office of 
Management and Budget review under Executive Order 12866, dated 
September 30, 1993. This is not a major rule under 5 U.S.C. 804.

DATES: Effective May 16, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Paul Linfield at (202) 501-1757 in 
reference to this FAR case. For general information, contact the FAR 
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-46, FAR case 91-119.

SUPPLEMENTARY INFORMATION:

A. Background

    A proposed rule was published in the Federal Register at 60 FR 
67028, December 27, 1995. The revisions in the final rule are based on 
the analysis of public comments and further clarification of the rule. 
The final rule--

--Permits the contracting officer to specify in the solicitation if 
there is insufficient time to consider requests for determinations 
under the Buy American Act in advance of receipt of offers;
--Uses more precise terminology for determinations regarding the 
inapplicability of the Buy American Act;
--Adds guidance regarding exceptions to the Buy American Act that are 
based on the Trade Agreements Act and North American Free Trade 
Agreement; and
--Clarifies when supporting information and price comparisons are 
needed.

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 the rule does not 
change the impact of the Buy American Act or alter the exceptions to 
the Act, but only clarifies the procedures for implementation of the 
Act.

C. Paperwork Reduction Act

    The Paperwork Reduction Act is deemed to apply because the clauses 
at FAR 52.225-5 and 52.225-15 require offerors/contractors requesting a 
determination regarding the inapplicability of the Buy American Act to 
provide the Government with certain information relating to foreign 
construction material the offeror/contractor proposes to use on the 
contract. A request for clearance of the information collection 
requirement previously was submitted to the Office of Management and 
Budget (OMB) under 44 U.S.C. 3501, et seq., and approved through 
February 28, 1999, under OMB Control Number 9000-0141.

List of Subjects in 48 CFR Parts 25 and 52

    Government procurement.

    Dated: March 7, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Parts 25 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR Parts 25 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 25--FOREIGN ACQUISITION


25.108   [Amended]

    2. Section 25.108 is amended in paragraph (b) by removing 
``25.202(a)(3)'' and inserting ``25.202(a)(2)''.


25.201   [Amended]

    3. Section 25.201 is amended in the definition of ``Domestic 
construction material'' by removing ``25.202(a)(3)'' and inserting 
``25.202(a)(2)''.
    4. Subpart 25.2 is amended by revising sections 25.202 through 
25.205 and adding sections 25.206 and 25.207 to read as follows:


25.202   Policy.

    (a) The Buy American Act requires that only domestic construction 
materials be used in construction in the United States, except when--
    (1) The cost would be unreasonable, i.e., the cost of domestic 
construction material exceeds the cost of foreign construction material 
by more than 6 percent, unless the agency head determines a higher 
percentage to be appropriate (see Executive Order 10582);
    (2) The head of the contracting activity or designee determines the 
construction material is not mined, produced, or manufactured in the 
United States in sufficient and reasonably available commercial 
quantities of a satisfactory quality (see 25.108);
    (3) The agency head determines that application of the restrictions 
of the Buy American Act to a particular construction material would be 
impracticable; or
    (4) The agency head determines that application of the restrictions 
of the Buy American Act to a particular construction material would be 
inconsistent with the public interest. Under this authority, agencies 
may have agreements with foreign governments that provide blanket 
exceptions to the Buy American Act (e.g., Trade Agreements Act and 
North American Free Trade Agreement (NAFTA)).
    (b) Unless the contracting officer determines that insufficient 
time is available, offerors should request determinations regarding the 
inapplicability of the Buy American Act in time to allow determination 
before submission of offers.
    (c) When it is determined for any of the reasons stated in this 
section that certain foreign construction materials may be used, the 
excepted materials shall be listed in the contract. Findings justifying 
the exception shall be available for public inspection.
    (d) For construction contracts with an acquisition value of 
$6,500,000 or more, but less than $7,311,000, see 25.402(a)(3). If the 
acquisition value is $7,311,000 or more, see 25.402(a)(1).


25.203   Determinations requested before submission of offers.

    (a) Any request for a determination regarding the inapplicability 
of the Buy American Act made before receipt of offers shall be 
evaluated based on the information requested in the applicable clause 
at 52.225-5, Buy American Act--Construction Materials, paragraphs (c) 
and (d), or 52.225-15, Buy American Act--Construction Materials under 
Trade Agreements Act and North

[[Page 12699]]

American Free Trade Agreement, paragraphs (c) and (d), and may be 
supplemented by other information readily available to the contracting 
officer.
    (b) If the Government determines before receipt of offers that an 
exception to the Buy American Act applies (other than a general 
exception based on the Trade Agreements Act or NAFTA), the excepted 
material shall be identified by the Government in the clause at 52.225-
5(b)(2) or 52.225-15(b)(3).


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-
5(b)(2) or 52.225-15(b)(3) or excepted under the Trade Agreements Act 
or NAFTA (52.225-15(b)(2)) must provide the information required by 
paragraphs (c) and (d) of the respective clauses.
    (b) Unless agency regulations specify a higher percentage, the 
Government will add to the offered price 6 percent of the cost of any 
foreign construction material proposed for exception from the 
requirements of the Buy American Act based on the unreasonable cost of 
domestic construction materials. If the evaluation of offers results in 
a tie between an offer including foreign construction material excepted 
on the basis of unreasonable cost, as evaluated, and an offer including 
solely domestic construction material or other foreign construction 
material that is excepted by the Government in the solicitation under 
the clause at 52.225-5(b) (2) or 52.225-15(b)(2) or (3) or subsequently 
excepted on a basis other than unreasonable cost, award shall be made 
to the offeror that submitted the latter offer.
    (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, upon evaluation of an offer, the Government determines that 
an exception to the Buy American Act applies, and the Government 
accepts that offer, the excepted material shall be listed in the 
contract at 52.225-5(b)(2) or 52.225-15(b)(3).


25.205  Postaward determinations.

    (a) If a contractor requests a determination regarding the 
inapplicability of the Buy American Act after contract award, the 
contractor shall explain why the determination could not have been 
requested before contract award or why the need for such determination 
otherwise was not reasonably foreseeable. If the contractor does not 
submit a satisfactory explanation, the Government need not make a 
determination regarding the inapplicability of the Buy American Act.
    (b) Evaluation of any request for a determination regarding the 
inapplicability of the Buy American Act made after contract award shall 
be based on information similar to that required before award by the 
applicable clause at 52.225-5 (c) and (d) or 52.225-15 (c) and (d) and/
or other information readily available to the contracting officer.
    (c) If a determination is made after contract award that an 
exception to the Buy American Act applies, the contract shall be 
modified to allow use of foreign construction material, and adequate 
consideration shall be negotiated. However, when the basis for the 
exception is the unreasonable price of a domestic construction 
material, adequate consideration shall not be less than the 
differential established in 25.202(a)(1) or agency procedures.


25.206  Noncompliance.

    (a) The contracting officer is responsible for conducting Buy 
American Act investigations when available information indicates such 
action is warranted.
    (b) Unless fraud is suspected, the contracting officer shall notify 
the contractor of the apparent unauthorized use of foreign construction 
material and request a reply, to include proposed corrective action.
    (c) If an investigation reveals that a contractor or subcontractor 
has used foreign construction material without authorization, the 
contracting officer shall take appropriate action, including one or 
more of the following:
    (1) Process a determination with regard to 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. Such 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 so stated in the determination. Further, 
such a determination to retain foreign construction material does not 
affect the Government's right to suspend and/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 
for suspension and/or debarment, including findings and supporting 
evidence in accordance with subpart 9.4, Debarment, Suspension, and 
Ineligibility. If the noncompliance appears to be fraudulent, consider 
referring the matter to other appropriate agency officials, such as the 
officer responsible for criminal investigation and prosecution.


25.207  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert the clause at 52.225-5, 
Buy American Act--Construction Materials, in solicitations and 
contracts for construction inside the United States, except when the 
clause at 52.225-15, Buy American Act--Construction Materials under 
Trade Agreements Act and North American Free Trade Agreement, is 
prescribed.
    (b)(1) The contracting officer shall insert the provision at 
52.225-12, Notice of Buy American Act Requirement--Construction 
Materials, in solicitations for construction that contain the clause at 
52.225-5, Buy American Act--Construction Materials.
    (2) If the contracting officer determines that insufficient time is 
available to process a determination regarding the inapplicability of 
the Buy American Act prior to receipt of offers, the contracting 
officer shall use the provision with its Alternate I.
    (c)(1) The contracting officer shall insert the provision at 
52.225-13, Notice of Buy American Act Requirement--Construction 
Materials under Trade Agreements Act and North American Free Trade 
Agreement, in solicitations for construction that contain the clause at 
52.225-15, Buy American Act--Construction Materials under Trade 
Agreements Act and North American Free Trade Agreement.
    (2) If the contracting officer determines that insufficient time is 
available to process a determination regarding the inapplicability of 
the Buy American Act prior to receipt of offers,

[[Page 12700]]

the contracting officer shall use the provision with its Alternate I.
    (d)(1) The contracting officer shall insert the clause at 52.225-
15, Buy American Act--Construction Materials under Trade Agreements Act 
and North American Free Trade Agreement, in solicitations and contracts 
for construction inside the United States with an estimated acquisition 
value of $7,311,000 or more.
    (2) For solicitations and contracts for construction inside the 
United States with an estimated acquisition value of $6,500,000 or 
more, but less than $7,311,000, the contracting officer shall use the 
clause with its Alternate I.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Section 52.225-5 is amended by revising the introductory 
paragraph; revising the clause date; revising paragraph (a) 
introductory text; by removing the phrase ``as used in this clause'' 
from the definitions of ``Components'', ''Construction material'' and 
``Domestic construction material''; by removing from the definition of 
Domestic construction material'' ``25.202(a)(3)'' and inserting 
``25.202(a)(2)''; by revising paragraph (b) (the undesignated paragraph 
following paragraph (b) is removed); and adding paragraphs (c) and (d) 
to read as follows:


52.225-5  Buy American Act--Construction Materials.

    As prescribed in 25.207(a), insert the following clause:

Buy American Act--Construction Materials (May 1997)

    (a) Definitions. As used in this clause--
* * * * *
    (b)(1) The Buy American Act (41 U.S.C. 10a-10d) requires that 
only domestic construction material be used 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 excepted construction 
material or components listed by the Government as follows:

----------------------------------------------------------------------
(List applicable accepted materials or indicate ``none'')

    (3) Other foreign construction material may be added to the list 
in paragraph (b)(2) of this clause if the Government determines 
that--
    (i) The cost would be unreasonable (the cost of a particular 
domestic construction material shall be determined to be 
unreasonable when the cost of such material exceeds the cost of 
foreign material by more than 6 percent, unless the agency head 
determines a higher percentage to be appropriate);
    (ii) The application of the restriction of the Buy American Act 
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.
    (4) The Contractor agrees that only domestic construction 
material will be used by the Contractor, subcontractors, material 
men, and suppliers in the performance of this contract, except for 
foreign construction materials, if any, listed in paragraph (b)(2) 
of this clause.
    (c) Request for determination. (1) Contractors requesting to use 
foreign construction material under paragraph (b)(3) of this clause 
shall provide adequate information for Government evaluation of the 
request for a determination regarding the inapplicability of the Buy 
American Act. Each submission shall include a description of the 
foreign and domestic construction materials, including unit of 
measure, quantity, price, time of delivery or availability, location 
of the construction project, name and address of the proposed 
contractor, and a detailed justification of the reason for use of 
foreign materials cited in accordance with paragraph (b)(3) of this 
clause. A submission 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. 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).
    (2) If the Government determines after contract award that an 
exception to the Buy American Act applies, the contract shall be 
modified to allow use of the foreign construction material, and 
adequate consideration shall be negotiated. However, when the basis 
for the exception is the unreasonable price of a domestic 
construction material, adequate consideration shall not be less than 
the differential established in paragraph (b)(3)(i) of this clause.
    (3) If the Government does not determine that an exception to 
the Buy American Act applies, the use of that particular foreign 
construction material will be a failure to comply with the Act.
    (d) For evaluation of requests under paragraph (c) of this 
clause based on unreasonable cost, the following information and any 
applicable supporting data based on the survey of suppliers shall be 
included in the request:

                          Foreign and Domestic Construction Materials Price Comparison                          
----------------------------------------------------------------------------------------------------------------
                                                                      Unit of                          Price    
                Construction material description                     measure        Quantity      (dollars) \1\
----------------------------------------------------------------------------------------------------------------
Item 1:                                                                                                         
    Foreign construction material...............................  ..............  ..............  ..............
    Domestic construction material..............................  ..............  ..............  ..............
Item 2:                                                                                                         
    Foreign construction material...............................  ..............  ..............  ..............
    Domestic constructionmaterial...............................  ..............  ..............  ..............
List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral,     
 attach summary.                                                                                                
Include other applicable supporting information.                                                                
----------------------------------------------------------------------------------------------------------------
\1\ Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free     
  entry certificate is issued).                                                                                 

(End of clause)

    6. Sections 52.225-12 and 52.225-13 are added to read as follows:


52.225-12  Notice of Buy American Act Requirement-Construction 
Materials.

    As prescribed in 25.207(b), insert the following provision:

Notice of Buy American Act Requirement-Construction Materials (May 
1997)

    (a) Offerors are required to comply with the requirements of 
Federal Acquisition Regulation (FAR) clause 52.225-5, Buy American 
Act Construction Materials, of this solicitation. The terms 
``construction material'' and ``domestic construction material,'' as 
used in this provision, have the meanings set forth in FAR clause 
52.225-5.
    (b) Offerors should request a determination regarding the 
inapplicability of the Buy American Act in time to allow 
determination before submission of offers. For evaluation of a 
request for a determination regarding the inapplicability of the 
requirements of the Buy American Act prior to the time set for 
receipt of offers, the information and applicable supporting data 
required by paragraphs (c) and (d) of FAR clause 52.225-5 shall be 
included in the request. If an offeror has not requested a 
detemination regarding the inapplicability of the Buy American Act 
prior to submission of its offer, or has not received

[[Page 12701]]

a response to a request made prior to submission of its offer, the 
information and supporting data shall be included in the offer.
    (c) Evaluation of offers. (1) For evaluation of offers, (unless 
agency regulations specify a higher percentage) the Government will 
add to the offered price 6 percent of the cost of any foreign 
construction material proposed for exception from the requirements 
of the Buy American Act based on claimed unreasonable cost of 
domestic construction materials in accordance with paragraph 
(b)(3)(i) of FAR clause 52.225-5.
    (2) If the evaluation of offers results in a tie between an 
offer including such foreign construction material excepted on the 
basis of unreasonable cost, as evaluated, and an offer including 
solely domestic construction material or other foreign construction 
material listed in the solicitation at paragraph (b)(2) of FAR 
clause 52.225-5, or subsequently excepted in accordance with 
paragraphs (b)(3) (ii) or (iii) of FAR clause 52.225-5, award shall 
be made to the offeror that submitted the latter offer.
    (d) Alternate offers. (1) When an offer includes foreign 
construction material not listed by the Government in the 
solicitation at paragraph (b)(2) of FAR clause 52.225-5, offerors 
also may submit alternate offers based on use of equivalent domestic 
construction material.
    (2) If alternate offers are submitted, a separate Standard Form 
1442 shall be submitted for each alternate offer, and a separate 
price comparison table, prepared in accordance with paragraphs (c) 
and (d) of FAR clause 52.225-5, shall be submitted for each offer 
that is based on the use of any foreign construction material for 
which the Government has not yet determined an exception to apply.
    (3) If the Government determines that a particular exception 
requested under paragraph (c) of FAR clause 52.225-5 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.
    (i) In sealed bid procurements, any offer based on use of that 
particular foreign construction material shall be rejected as 
nonresponsive.
    (ii) In negotiated procurements, any offer based on use of that 
particular foreign construction material may not be accepted unless 
revised during negotiations.

(End of provision)

    Alternate I. (MAY 1997) As prescribed in 25.207(b)(2), 
substitute the following paragraph (b) for paragraph (b) of the 
basic provision:
    (b) An offeror requesting a determination regarding the 
inapplicability of the Buy American Act shall submit such request 
with its offer, including the information and applicable supporting 
data required by paragraphs (c) and (d) of FAR clause 52.225-5.


52.225-13  Notice of Buy American Act Requirement--Construction 
Materials under Trade Agreements Act and North American Free Trade 
Agreement.

    As prescribed in 25.207(c)(1), insert the following provision:

Notice of Buy American Act Requirement--Construction Materials under 
Trade Agreements Act and North American Free Trade Agreement (May 1997)

    (a) Offerors are required to comply with the requirements of 
Federal Acquisition Regulation (FAR) clause 52.225-15, Buy American 
Act--Construction Materials Under Trade Agreements Act and North 
American Free Trade Agreement, of this solicitation. The terms 
defined in FAR clause 52.225-15 have the same meaning in this 
provision.
    (b) Offerors should request a determination regarding the 
inapplicability of the Buy American Act in time to allow 
determination before submission of offers. For evaluation of a 
request for a determination regarding the inapplicability of the 
requirements of the Buy American Act prior to the time set for 
receipt of offers, the information and applicable supporting data 
required by paragraphs (c) and (d) of FAR clause 52.225-15 shall be 
included in the request. If an offeror has not requested a 
determination regarding the inapplicability of the Buy American Act 
prior to submission of its offer, or has not received a response to 
a request made prior to submission of its offer, the information and 
supporting data shall be included in the offer.
    (c) Evaluation of offers. (1) For evaluation of offers, (unless 
agency regulations specify a higher percentage) the Government will 
add to the offered price 6 percent of the cost of any foreign 
construction material proposed for exception from the requirements 
of the Buy American Act based on claimed unreasonable cost of 
domestic construction materials in accordance with paragraph 
(b)(4)(i) of FAR clause 52.225-15.
    (2) If the evaluation of offers results in a tie between an 
offer including such foreign construction material excepted on the 
basis of unreasonable cost, as evaluated, and an offer including 
solely domestic construction material or other foreign construction 
material, listed in the solicitation at paragraph (b)(3) of FAR 
clause 52.225-15, or subsequently excepted in accordance with 
paragraphs (b)(4)(ii) or (iii) of FAR clause 52.225-15, award shall 
be made to the offeror that submitted the latter offer.
    (d) Alternate offers. (1) When an offer includes foreign 
construction material not listed by the Government in the 
solicitation at paragraph (b)(3) of FAR clause 52.225-15, offerors 
also may submit alternate offers based on use of equivalent domestic 
construction material.
    (2) If alternate offers are submitted, a separate Standard Form 
1442 shall be submitted for each alternate offer, and a separate 
price comparison table, prepared in accordance with paragraphs (c) 
and (d) of FAR clause 52.225-15, shall be submitted for each offer 
that is based on the use of any foreign construction material for 
which the Government has not yet determined an exception to apply.
    (3) If the Government determines that a particular exception 
requested under paragraph (c) of FAR clause 52.225-15 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.
    (i) In sealed bid procurements, any offer based on use of that 
particular foreign construction material shall be rejected as 
nonresponsive.
    (ii) in negotiated procurements, any offer based on use of that 
particular foreign construction material may not be accepted unless 
revised during negotiations.

(End of provision)

    Alternate I (MAY 1997). As prescribed in 25.207(c)(2), 
substitute the following paragraph (b) for paragraph (b) of the 
basic provision:
    (b) An offeror requesting a determination regarding the 
inapplicability of the Buy American Act shall submit such request 
with its offer, including the information and applicable supporting 
data required by paragraphs (c) and (d) of FAR clause 52.225-15.

    7. Section 52.225-15 is amended by revising the introductory 
paragraph, and the clause date; in the definition of ``Domestic 
construction material'' by removing ``25.202(a)(3)'' and inserting 
``25.202(a)(2)''; by revising paragraphs (b) and (c); and by adding 
paragraph (d) to read as follows:


52.225-15  Buy American Act--Construction Materials under Trade 
Agreements Act and North American Free Trade Agreement.

    As prescribed in 25.207(d), insert the following clause:

Buy American Act--Construction Materials Under Trade Agreements Act and 
North American Free Trade Agreement (May 1997)

* * * * *
    (b)(1) The Buy American Act (41 U.S.C. 10a--10d) requires that 
only domestic construction material be used in performing this 
contract, except as provided in paragraphs (b)(2), (b)(3), and 
(b)(4) of this clause.
    (2) The Trade Agreements Act and the North American Free Trade 
Agreement (NAFTA) provide that designated country and NAFTA country 
construction materials are exempted from application of the Buy 
American Act.
    (3) The requirement in paragraph (b)(1) of this clause does not 
apply to the excepted construction material or components listed by 
the Government as follows:

----------------------------------------------------------------------
(List applicable accepted materials or indicate ``none'')

    (4) Other foreign construction material may be added to the list 
in paragraph (b)(3) of this clause if the Government determines 
that--
    (i) The cost would be unreasonable (the cost of a particular 
domestic construction material shall be determined to be 
unreasonable when the cost of such material

[[Page 12702]]

exceeds the cost of foreign material by more than 6 percent, unless 
the agency head determines a higher percentage to be appropriate);
    (ii) The application of the restriction of the Buy American Act 
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.
    (5) The Contractor agrees that only domestic construction 
materials, NAFTA country construction materials, or designated 
country construction materials will be used by the Contractor, 
subcontractors, material men, and suppliers in the performance of 
this contract, except for foreign construction materials, if any, 
listed in paragraph (b)(3) of this clause.
    (c) Request for determination. (1) Contractors requesting to use 
foreign construction material under paragraph (b)(4) of this clause 
shall provide adequate information for Government evaluation of the 
request for a determination regarding the inapplicability of the Buy 
American Act. Each submission shall include a description of the 
foreign and domestic construction materials, including unit of 
measure, quantity, price, time of delivery or availability, location 
of the construction project, name and address of the proposed 
contractor, and a detailed justification of the reason for use of 
foreign materials cited in accordance with paragraph (b)(4) of this 
clause. A submission 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. 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).
    (2) If the Government determines after contract award that an 
exception to the Buy American Act applies, the contract shall be 
modified to allow use of the foreign construction material, and 
adequate consideration shall be negotiated. However, when the basis 
for the exception is the unreasonable price of a domestic 
construction material, adequate consideration shall not be less than 
the differential established in paragraph (b)(4)(i) of this clause.
    (3) If the Government does not determine that an exception to 
the Buy American Act applies, the use of that particular foreign 
construction material will be a failure to comply with the Act.
    (d) For evaluation of requests under paragraph (c) of this 
clause based on unreasonable cost, the following information and any 
applicable supporting data based on the survey of suppliers shall be 
included in the request:

                          Foreign and Domestic Construction Materials Price Comparison                          
----------------------------------------------------------------------------------------------------------------
                                                                      Unit of                          Price    
                Construction material description                     measure        Quantity      (dollars) \1\
----------------------------------------------------------------------------------------------------------------
Item 1:                                                                                                         
    Foreign construction material...............................  ..............  ..............  ..............
    Domestic construction material..............................  ..............  ..............  ..............
Item 2:                                                                                                         
    Foreign construction material...............................  ..............  ..............  ..............
    Domestic construction material..............................  ..............  ..............  ..............
List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral,     
 attach summary.                                                                                                
Include other applicable supporting information.                                                                
----------------------------------------------------------------------------------------------------------------
\1\ Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free     
  entry certificate is issued).                                                                                 

(End of clause)

    Alternate I (MAY 1997). As prescribed in 25.207(d)(2), 
substitute the following paragraphs (b)(2) and (b)(5) for paragraphs 
(b)(2) and (b)(5) of the basic clause:
    (b)(2) The North American Free Trade Agreement (NAFTA) provides 
that NAFTA construction materials are exempted from application of 
the Buy American Act.
    (b)(5) The Contractor agrees that only domestic construction 
materials or NAFTA country construction materials will be used by 
the Contractor, subcontractors, material men, and suppliers in the 
performance of this contract, except for other foreign construction 
materials, if any, listed in paragraph (b)(3) of this clause.


52.225-22  [Amended]

    8. Section 52.225-22 is amended by revising the clause date to read 
``(MAY 1997)''; and in the definition of ``Domestic construction 
material'' by removing ``25.202(a)(3)'' and inserting ``25.202(a)(2)''.

[FR Doc. 97-6315 Filed 3-14-97; 8:45 am]
BILLING CODE 6820-EP-P