[Federal Register Volume 63, Number 187 (Monday, September 28, 1998)]
[Proposed Rules]
[Pages 51642-51667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25528]



[[Page 51641]]

_______________________________________________________________________

Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 1, et al.



Federal Acquisition Regulation; Foreign Acquisition (Part 25 Rewrite); 
Proposed Rule

  Federal Register / Vol. 63, No. 187 / Monday, September 28, 1998 / 
Proposed Rules  

[[Page 51642]]



DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 5, 6, 9, 12, 13, 14, 15, 17, 25, and 52

[FAR Case 97-024]
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: Proposed rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council are proposing to amend the Federal 
Acquisition Regulation (FAR) to rewrite guidance and clauses on foreign 
acquisition. 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: Comments should be submitted on or before November 27, 1998 to 
be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (MVRS), Attn: Ms. 
Laurie Durate, 1800 F Street, NW, Room 4035, Washington, DC 20405, E-
mail comments submitted over Internet should be addressed to: 
[email protected].
    Please cite FAR case 97-024 in all correspondence related to this 
case.

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 FAR case 97-024.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule constitutes a rewrite of FAR Part 25 and the associated 
clauses in Part 52. Part 25 implements a number of statutes and 
executive orders that use different terminology that have specific 
definitions. These statutes and executive orders provide different 
exceptions and may exempt certain departments or agencies. The effort 
to rewrite FAR Part 25 was undertaken to make the various policies and 
procedures that implement these statutes and executive orders in 
acquisitions of foreign supplies, services, and construction materials 
clearer and more understandable to the reader. In addition to numerous 
editorial changes, some policies and procedures were clarified to 
eliminate potential conflict or inconsistency with other parts of the 
FAR. Several changes were made to provide either new or more consistent 
and uniform direction to agencies. One of the more significant of these 
changes, discussed below, addresses the treatment of U.S. made end 
products for acquisitions subject to the Trade Agreements Act.
    To qualify as a domestic end product under the Buy American Act, 
the end product must be manufactured in the United States and the cost 
of the components manufactured in the United States must exceed 50% of 
the cost of all components. Under the Trade Agreements Act, the country 
of origin of an end product that is not wholly the growth, product or 
manufacture of a country, is the country in which the end product is 
substantially transformed into a new and different article, without 
regard to the source of the components. The proposed rule defines U.S. 
made end products as products that are manufactured or substantially 
transformed in the United States, regardless of the source of the 
components. Therefore, U.S. made end products pass the Trade Agreements 
Act country of origin test, but do not necessarily qualify as domestic 
end products under the Buy American Act.
    The Trade Agreements Act prohibits the purchase of foreign end 
products, except for the products of countries that are eligible under 
the Trade Agreements Act, the North American Free Trade Agreement, the 
Caribbean Basin Economic Recovery Initiative, or some other agreement. 
These eligible products compete on an equal basis with domestic end 
products, without application of a Buy American Act or Balance of 
Payments Program evaluation factor.
    The Trade Agreements Act does not specifically address the 
treatment of U.S. made end products that do not qualify as domestic end 
products under the Buy American Act. Because these other U.S. made end 
products are foreign end products under the Buy American Act and are 
not the products of an eligible country, the current FAR prohibits a 
contractor from supplying these other U.S. made end products when the 
Trade Agreements Act applies.
    In 1990, the GSBCA Board of Contract Appeals ruled that the Trade 
Agreements Act does not prohibit the purchase of U.S. products. See 
International Business Machines Corp., GSBCA No. 10532-P, May 18, 1990, 
90-2 BCA. U.S. made end products that do not meet the definition of 
domestic end product under the Buy American Act are not foreign end 
products included in the Trade Agreements Act procurement prohibition. 
Until now, the GSBCA decision has been separately implemented by each 
agency. This proposed rule revises the FAR to permit the purchase of 
all U.S. made end products, whether or not they are domestic end 
products. All such products compete equally with eligible end products. 
Agencies that previously needed to deviate from the FAR to conform 
their acquisitions to the GSBCA decision will no longer need a 
deviation, since that decision is implemented in the proposed rule.
    However, the Board did not rule on the application of the Buy 
American Act when a U.S. made end product that is not a domestic end 
product competes with a domestic end product. As a result, an agency 
may handle this evaluation differently. As a matter of policy, agencies 
generally apply the Balance of Payments Program to overseas 
acquisitions in the same way they apply the Buy American Act to 
acquisitions in the United States. For example, GSA and the Department 
of Commerce do not apply the Buy American Act or Balance of Payments 
Program to provide a preference for domestic end products over other 
U.S. made end products that do not qualify as domestic end products 
when the Trade Agreements Act applies, i.e., all U.S. made end products 
are treated the same. On the other hand, unless a waiver of the Buy 
American Act has been specifically granted, DoD does provide an 
evaluation preference to domestic end products, when such products are 
competing with other U.S. made end products that do not qualify as 
domestic end products. DoD has waived application of the Buy American 
Act/Balance of Payments Program for all U.S. made information 
technology end products, when the Trade Agreements Act applies.
    The evaluation procedures at FAR 25.502(b)(2) are appropriate for 
those agencies that provide the same treatment to all U.S. made end 
products. The proposed rule does not require a determination as to 
whether a U.S. made end product is domestic through an assessment of 
the source and value

[[Page 51643]]

of the components. Agencies, such as DoD, that in some cases apply the 
Buy American Act or Balance of Payments Program evaluation preference 
to domestic end products in competition with other U.S. made end 
products in acquisitions subject to the Trade Agreements Act, may 
provide alternative evaluation procedures in agency FAR supplements.
    Numerous structural and editorial changes are proposed. Revisions 
include--(1) adding an overview to help readers understand the part 
(25.001, General); (2) adding 25.002, Applicability of subparts; (3) 
adding definitions of ``cost of components,'' ``eligible offer,'' 
``noneligible product,'' ``Israeli end product,'' ``nondesignated 
country end product,'' and ``U.S. made end product;'' eliminating 
unnecessary definitions; and relocating all definitions to 25.003; and 
(4) adding text and examples for evaluating offers under the Buy 
American Act and trade agreements for supply contracts.
    In this proposed rule, the clauses prescribed in Part 25 have been 
renumbered, revised, and sometimes both. In order to better understand 
the revisions to Part 52, the following list is provided:

------------------------------------------------------------------------
                                                               New FAR
                     Current FAR section                       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
------------------------------------------------------------------------

B. Regulatory Flexibility Act

    This proposed 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 it 
primarily clarifies existing guidance pertaining to acquisition of 
foreign supplies, services, and construction. An Initial Regulatory 
Flexibility Analysis has, therefore, not been performed. Comments are 
invited from small businesses and other interested parties. Comments 
from small entities concerning the affected FAR subpart will be 
considered in accordance with 5 U.S.C. 610 of the Act. Such comments 
must be submitted separately and should cite 5 U.S.C. 601, et seq. (FAR 
case 97-024), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) is deemed to 
apply because the proposed rule contains information collection 
requirements. These information collection requirements were submitted 
and cleared by the Office of Management and Budget (OMB) under 44 
U.S.C. 3501, et seq. The OMB control numbers are 9000-0022, 9000-0023, 
9000-0024, 9000-0025, 9000-0130, and 9000-0141.
    The existing provisions at 52.225-1, Buy American Certificate, and 
52.225-6, Balance of Payments Program Certificate (OMB Control Numbers 
9000-0024 and 9000-0023, respectively), are now combined into a new 
provision at 52.225-2, Buy American Act--Balance of Payments Program 
Certificate, with no change in paperwork burden. The existing provision 
at 52.225-8, Buy American Act--Trade Agreements--Balance of Payments 
Program Certificate (OMB Control Number 9000-0025) is replaced by the 
provision at 52.225-6, Trade Agreements Certificate. The existing 
provision at 52.225-20, Buy American Act--North American Free Trade 
Agreement Implementation Act--Balance of Payments Program Certificate 
(OMB Control Number 9000-0130) is replaced by the provision at 52.225-
4, Buy American Act--North American Free Trade Agreement--Israeli Trade 
Act--Balance of Payments Program Certificate. These replacement 
provisions eliminate redundancies in required listing of foreign end 
products and country of origin. The provisions and clauses at 52.225-5, 
Buy American Act--Construction Materials; 52.225-15, Buy American Act--
Construction Materials under Trade Agreements Act and North American 
Free Trade Agreement; 52.225-12, Notice of Buy American Act 
Requirement-- Construction Materials; 52.225-13, Notice of Buy American 
Act Requirement--Construction Materials under Trade Agreements Act and 
North American Free Trade Agreement (OMB Clearance 9000-0141); and 
52.225-22, Balance of Payments Program-- Construction Materials--NAFTA, 
are replaced by the provisions and clauses at 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; and 
52.225-12, Notice of Buy American Act/Balance of Payments Program 
Requirement--Construction Materials under Trade Agreements. There is no 
change in burden relating to the renumbered clause at 52.225-8 entitled 
``Duty-Free Entry,'' currently 52.225-10 (OMB Clearance 9000-0022).

List of Subjects in 48 CFR Parts 1, 5, 6, 9, 12, 13, 14, 15, 17, 
25, and 52

    Government procurement.

    Dated: September 18, 1998.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, it is proposed that 48 CFR Parts 1, 5, 6, 9, 12, 13, 14, 
15, 17, 25, and 52 be amended as set forth below:
    1. The authority citation for 48 CFR Parts 1, 5, 6, 9, 12, 13, 14, 
15, 17, 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 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

    2. Section 1.106 is amended in the table following the introductory 
paragraph by removing the FAR Segment and OMB Control number in the 
left columns and inserting the FAR Segment and OMB Control Number 
listed in the right columns as follows:

----------------------------------------------------------------------------------------------------------------
                         Remove                                                   Insert
----------------------------------------------------------------------------------------------------------------
    FAR segment               OMB control No.                FAR segment               OMB control No.
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------


[[Page 51644]]

PART 5--PUBLICIZING CONTRACT ACTIONS


5.301  [Amended]

    3. Section 5.301 is amended in the parenthetical in paragraph 
(a)(1) by removing ``(see 25.402 and 25.403)'' and inserting ``(see 
subpart 25.4)''.

PART 6--COMPETITION REQUIREMENTS

    4. Section 6.303-1 is amended by revising the first sentence of 
paragraph (d) to read as follows:


6.303-1  Requirements.

* * * * *
    (d) Contract actions subject to the Trade Agreements Act (see 
subpart 25.4) may be made without providing for full and open 
competition only when permitted and justified pursuant to this subpart. 
* * *
* * * * *

PART 9--CONTRACTOR QUALIFICATIONS

    5. Section 9.205 is amended by revising paragraph (b) to read as 
follows:


9.205  Opportunity for qualification before award.

* * * * *
    (b) The activity responsible for establishing a qualification 
requirement shall keep any list maintained of those already qualified 
open for inclusion of additional products, manufacturer, 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

    6. Section 12.205 is amended by revising paragraph (c) 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)).


12.504  [Amended]

    7. Section 12.504 is amended 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]

    8. Section 13.101 is amended by removing paragraph (a)(3) and 
redesignating (a)(4) as (a)(3).

PART 14--SEALED BIDDING

    9. Section 14.201-6 is amended by revising paragraphs (x) and (y) 
to read as follows:


14.201-6  Solicitation provisions.

* * * * *
    (x) The provision at 52.214-34, Submission of Offers in the English 
Language, is required 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.
    (y) The provision at 52.214-35, Submission of Offers in U.S. 
Currency, is required in solicitations that include any of the clauses 
prescribed in 25.1101 or 25.1102, unless the clause at 52.225-17, 
Evaluation of Foreign Currency Offers, prescribed in 25.1103(d) is 
included. It may be included in other solicitations when the 
contracting officer decides that it is necessary.


14.409-1  [Amended]

    10. Section 14.409-1 is amended in paragraph (a)(2) by removing the 
reference ``25.405(e)'' and inserting ``25.408(a)(5)''.

PART 15--CONTRACTING BY NEGOTIATION


15.209  [Amended]

    11. Section 15.209 is amended by removing the reference ``25.901'' 
and inserting ``25.1001'' in paragraph (b)(4).

PART 17--SPECIAL CONTRACTING METHODS

    12. Section 17.203 is amended by revising paragraph (h) 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.
    13. Part 25 is revised to read as follows:

PART 25--FOREIGN ACQUISITION

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  Other trade agreements.
25.504-4  Group award basis.

[[Page 51645]]

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).

PART 25--FOREIGN ACQUISITION


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 it is determined that the price of the lowest domestic 
offer is unreasonable, or if another exception applies (see subpart 
25.1); and
    (2) Requires that, with some exceptions, only domestic construction 
materials be used 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 waived 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 will determine which of the trade agreements 
applies. Exceptions to the applicability of the trade agreements are 
described in subpart 25.4.
    (d) The test used to determine the country of origin for an end 
product under the trade agreements is different from the test used to 
determine the country of origin for an end product under the Buy 
American Act (see definitions of ``end product'' 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) Sanctions have been imposed against some European Union 
countries for discriminating against U.S. products and services (see 
subpart 25.6).


25.002  Applicability of subparts.

    The applicability of the subparts is shown in the following table. 
Comprehensive procedures for offer evaluation, and examples, are 
provided in subpart 25.5.

----------------------------------------------------------------------------------------------------------------
                                   Supplies for use              Construction             Services performed
           Subpart           -----------------------------------------------------------------------------------
                               Inside U.S.  Outside U.S.   Inside U.S.  Outside U.S.   Inside U.S.  Outside U.S.
----------------------------------------------------------------------------------------------------------------
25.1  Buy American Act--
 Supplies...................            X   ............  ............  ............  ............  ............
25.2  Buy American Act--
 Construction Materials.....  ............  ............            X   ............  ............  ............
25.3  Balance of Payments
 Program....................  ............            X   ............            X   ............  ............
25.4  Trade Agreements......            X             X             X             X             X             X
25.5  Evaluating Foreign
 Offers--Supply Contracts...            X             X   ............  ............  ............  ............
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 Coordination            X             X   ............            X   ............            X
25.9  Customs and Duties....            X   ............  ............  ............  ............  ............
25.10  Additional Foreign
 Acquisition Regulations....            X             X             X             X             X             X
25.11  Solicitation
 Provisions and Contract
 Clauses....................            X             X             X             X             X             X
----------------------------------------------------------------------------------------------------------------

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

[[Page 51646]]

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.
    Components means those articles, materials, and supplies 
incorporated directly into the end products.
    Construction means construction, alteration, or repair of any 
public building or public work.
    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, shall be evaluated as a single and distinct 
construction material regardless of when or how the individual parts or 
components of such 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
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

[[Page 51647]]

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 
the discriminatory treatment of the Buy American Act or the Balance of 
Payments Program due to the applicability of a trade agreement to a 
particular acquisition.
    End product means those articles, materials, and supplies to be 
acquired under the contract for public use.
    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, its 
territories, or possessions.
    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 product means a foreign end product that is not an 
eligible product.
    North American Free Trade Agreement (NAFTA) country means Canada or 
Mexico.
    NAFTA country end product means an article that--
    (1) Is wholly the growth, product, or manufacture of a 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 (EU) country construction means 
construction to be performed in a sanctioned EU member state.
    Sanctioned EU country end product means an article that--
    (1) Is wholly the growth, product, or manufacture of a sanctioned 
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 EU country services means services to be performed in a 
sanctioned EU member state.
    Sanctioned EU 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, its 
possessions, the Commonwealth of Puerto Rico, and any other place 
subject to its jurisdiction, but does not include leased bases or trust 
territories.
    U.S. made end product means an article that has been manufactured 
in the United States or that has been 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 (as amended). It applies 
to supplies acquired for use in the United States, including supplies 
acquired under contracts set aside for small business concerns, if--
    (a) The supply contract exceeds the micro-purchase threshold; or
    (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. The 
product of a small business concern (see subpart 19.5) 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 (see 25.003). The evaluation factor is not 
used to provide a preference for one

[[Page 51648]]

foreign offer over another. Evaluation procedures and examples are 
provided in subpart 25.5.


25.102  Policy.

    Except as provided in section 25.103, only domestic end products 
shall be acquired for public use inside the United States.


25.103  Exceptions.

    When one of the following exceptions applies, a foreign end product 
may be acquired 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. A determination may be made 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.
    (1) A nonavailability determination has been made for the articles 
listed in 25.104.
    (2)(i) Unless agency regulation prescribes otherwise, a 
nonavailability determination may be made by the head of the 
contracting activity under any circumstances, or by the contracting 
officer if all of the following conditions are present:
    (A) The acquisition was conducted through use of full and open 
competition.
    (B) The acquisition was synopsized in accordance with 5.201.
    (C) No offer for a domestic end product was received.
    (ii) A copy of each determination and supporting documentation 
shall be submitted to the appropriate council identified in 1.201-1 in 
accordance with agency procedures, for possible addition to the list in 
25.104.
    (c) Unreasonable cost. A decision may be made that the cost of an 
end product from a domestic source would be unreasonable, in accordance 
with 25.105 and subpart 25.5.
    (d) Resale. Foreign end products may be purchased 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.
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 offers or final proposal revisions that an article on the 
list has become available domestically in sufficient and reasonably 
available quantities of a satisfactory quality. The contracting officer 
shall amend the solicitation if purchasing the article, or if 
purchasing an end product that could contain such an article as a 
component, and shall specify in all new solicitations that the article 
has been found to be available and that offerors and contractors may 
not treat foreign components of the same class or kind as domestic 
components. In addition, a copy of supporting documentation shall be 
submitted to the appropriate council identified in 1.201-1 in 
accordance with agency procedures, for possible removal of the article 
from the list.

[[Page 51649]]

25.105  Determining reasonableness of cost.

    (a) The contracting officer--
    (1) Shall 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 will be applicable to all agency acquisitions, the agency 
evaluation factors shall be published in agency regulations.
    (2) Shall 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 shall 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.
    (2) 12 percent, if the lowest domestic offer is from a small 
business concern. The contracting officer shall 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.

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 (as amended). 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, only domestic construction materials 
shall be used in construction contracts performed in the United States.


25.202  Exceptions.

    (a) When one of the following exceptions applies, foreign 
construction materials may be acquired 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 determination of nonavailability of the articles listed at 
25.104(a) and the procedures at 25.104(b) also apply if any such 
articles are acquired as construction materials.
    (3) Unreasonable cost. The cost of domestic construction material 
is unreasonable if it exceeds the cost of foreign construction material 
by more than 6 percent, unless the head of the agency determines that a 
higher percentage is appropriate (see Executive Order 10582).
    (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 shall list 
the excepted materials in the contract. The agency shall 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) The contracting officer shall consider an offeror's request for 
a determination concerning the inapplicability of the Buy American Act 
for specifically identified construction materials if the request is 
received either before the time set for receipt of offers or submitted 
with the offer.
    (b) The contracting officer shall evaluate any request for a 
determination regarding the inapplicability of the Buy American Act 
made before award, based on the information requested in the applicable 
clause at 52.225-9, Buy American Act--Balance of Payments Program--
Construction Materials, paragraphs (c) and (d), or 52.225-11, Buy 
American Act--Balance of Payments Program--Construction Materials under 
Trade Agreements, paragraphs (c) and (d). The contracting officer may 
supplement this information with other readily available information.
    (c) If the appropriate authority determines before award that an 
exception to the Buy American Act applies (other than a general 
exception based on the Trade Agreements Act or NAFTA), the contracting 
officer shall identify the excepted material in paragraph (b)(2) of the 
clause at 52.225-9 or paragraph (b)(3) of the clause at 52.225-11.


25.204  Evaluating offers of foreign construction material.

    (a) Offerors proposing to use foreign construction material other 
than that listed by the Government in paragraph (b)(2) of the 
applicable clause at 52.225-9, or paragraph (b)(3) of 52.225-11, 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 agency regulations specify a higher percentage, the 
contracting officer shall 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. In the case of a tie, the 
contracting officer shall 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 award is made to an offeror that proposed foreign 
construction material not included 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 shall add these 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 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 contracting officer 
concludes that the request should have been made before

[[Page 51650]]

contract award, the request may be denied.
    (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 required by paragraphs (c) and (d) of the 
applicable clause at 52.225-9 or 52.225-11 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, adequate consideration shall 
be negotiated and the contract shall be modified 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 shall be at least the differential established in 
25.202(a) or in accordance with 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 shall 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 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. 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 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 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. Excepted supplies and construction 
materials shall be identified in the contract.


25.302  Policy.

    Except as provided in 25.303, only domestic end products shall be 
acquired for use outside the United States and only domestic 
construction materials shall be used 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, 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;
    (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. A 
differential greater than 50 percent may be used when specifically 
authorized by the head of the agency; or
    (g) 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 shall 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 shall--
    (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 
shall be applied to foreign construction material proposed

[[Page 51651]]

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 with a value greater than $25,000 that are subject to--
    (1) The Agreement on Government Procurement, as approved by 
Congress in the Trade Agreements Act of 1979 (19 U.S.C. 2501 et seq.) 
(Trade Agreements Act) and as amended by the Uruguay Round Agreements 
Act (Pub. L. 103-465), including the Agreement on Trade in Civil 
Aircraft (19 U.S.C. 2513);
    (2) 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.) shall be treated as eligible 
products under the Trade Agreements Act (Caribbean Basin Trade 
Initiative);
    (3) 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) (NAFTA); and
    (4) 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) (Israeli Trade Act).
    (b) For application of the trade agreements that are unique to 
individual agencies (Department of Defense, National Aeronautics and 
Space Administration, Department of Energy (Power Marketing 
Administration), and Department of the Interior (Bureau of 
Reclamation)), see agency regulations.


25.401  Exceptions.

    This subpart does not apply to--
    (a) Purchases under small business set-asides;
    (b) Purchases of arms, ammunition, or war materials, or purchases 
indispensable for national security or for national defense purposes;
    (c) Research and development contracts;
    (d) Purchases of end products for resale;
    (e) Purchases 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; and
    (f) Purchases not open to competition, when justified in accordance 
with subpart 6.3 (but see 25.408(b)).


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 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. However, eligible offers will not be given preference 
over a low acceptable foreign offer. Under the Trade Agreements Act, 
only U.S. made end products or eligible products may be acquired (also 
see 25.403(d)). See subpart 25.5 for evaluation procedures for supply 
contracts subject to trade agreements.


25.403  Trade Agreements Act.

    (a) General. 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 on the basis of foreign 
ownership (see 25.403(c));
    (3) Restricts purchases to end products identified in 25.403(d);
    (4) Provides a specific waiver with regard to purchase of civil 
aircraft from countries that are party to the Agreement on Trade in 
Civil Aircraft (see 25.407); and
    (5) Requires certain procurement procedures designed to ensure fair 
and open competition (see 25.408).
    (b) Applicability. (1) 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 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. No acquisition shall be divided with the 
intent of reducing the estimated value of the acquisition below the 
dollar threshold of the Trade Agreements Act.
    (c) Nondiscrimination. Subject to the provisions of U.S. law and 
regulation, a supplier established in a designated country or a 
Caribbean Basin country shall not be accorded less favorable treatment 
than is accorded to another supplier established in that country on the 
basis of--
    (1) Foreign ownership or affiliation; or
    (2) The place of production of the articles to be supplied; 
provided that the country of production is a designated country or a 
Caribbean Basin country.
    (d) Purchase restriction. (1) In acquisitions subject to the Trade 
Agreements Act, only U.S. made end products or eligible products 
(designated, Caribbean Basin, or NAFTA country end products) shall be 
acquired 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 U.S. Trade 
Representative has determined that for acquisitions

[[Page 51652]]

subject to the Trade Agreements Act, Caribbean Basin country end 
products shall be treated as eligible products. This determination is 
effective until September 30, 1998.


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, the contracting officer shall 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 (see 25.403(c)). 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. These 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), except 
for the following excluded services (Federal Service Code or Category 
from the Federal Procurement Data System Product/Service Code Manual 
indicated in parentheses):
    (1) Information processing and related telecommunications services.
    (i) ADP telecommunications and transmission services (D304).
    (ii) ADP teleprocessing and timesharing services (D305).
    (iii) Telecommunication network management services (D316).
    (iv) Automated news services, data services, or other information 
services (D317).
    (v) Other ADP and telecommunications services (D399).
    (2) Maintenance, repair, modification, rebuilding, and installation 
of equipment.
    (i) Maintenance, repair, modification, rebuilding, and installation 
of equipment related to ships (J019).
    (ii) Non-nuclear ship repair (J998).
    (3) Operation of Government-owned facilities.
    (i) All facilities operated by the Department of Defense, 
Department of Energy, and the National Aeronautics and Space 
Administration.
    (ii) Research and development facilities (M180).
    (4) Utilities--All classes (S).
    (5) Transportation, travel, and relocation services (V), except 
travel agent services (V302).
    (6) All services purchased in support of military forces overseas.
    (7) Construction dredging services.


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 
shall 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 for countries that are parties to the 
Agreement on Trade in Civil Aircraft. Those countries are Austria, 
Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, 
Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Romania, 
Spain, Sweden, Switzerland, and the United Kingdom.


25.408  Procedures.

    (a) When the Trade Agreements Act or NAFTA applies, the contracting 
officer shall--
    (1) Comply with the requirements of 5.203, Publicizing and response 
time;
    (2) Not include technical requirements in solicitations solely to 
preclude the acquisition of eligible products;
    (3) Specify in solicitations that offers shall be submitted 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);
    (4) Open offers in the presence of an impartial witness and record 
this individual's name in the contract file, if anticipating 
competitive negotiations; and
    (5) Provide unsuccessful offerors from designated or NAFTA 
countries written notice within 3 days after award of a contract for an 
eligible product, in accordance with 14.409-1 and 15.503. ``Day,'' for 
purposes of the notification process, means calendar day, except that 
if the last day of the period is a Saturday, Sunday, or legal holiday, 
the period will be extended until the first subsequent day that is not 
a Saturday, Sunday, or legal holiday.
    (b) Acquisitions under the Trade Agreements Act are subject to the 
competition requirements of part 6 (see 6.303-1(d)).
    (c) See subpart 25.5 for evaluation procedures and examples.

Subpart 25.5--Evaluating Foreign Offers--Supply Contracts


25.501  General.

    The contracting officer--
    (a) Shall 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) Shall identify and reject offers of end products that are 
prohibited or sanctioned in accordance with subparts 25.6 and 25.7.
    (d) Shall 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.


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.
    (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.

[[Page 51653]]

    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(d)).
    (c) For acquisitions not subject to the Trade Agreements Act--
    (1) If the low offer is a domestic offer or an eligible offer under 
a trade agreement other than the Trade Agreements Act, award on that 
offer.
    (2) If the low offer is a noneligible offer and there were no 
domestic offers, make a nonavailability determination (see 
25.103(b)(2)) and 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 25.301 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) When 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.
    (e) 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 part of the offer 
consists of items restricted under 25.403(d).
    (b) Where an offeror restricts award to a group of line items or to 
all line items contained in its offer, determine for each line item 
whether to apply an evaluation factor (see 25.504-4, Example 7):
    (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 on each line item the offer with the lowest 
evaluated price.
    (2) Evaluate an offer that specifies an award restriction against 
the proposed 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 8).
    (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 the 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) Example 1.

----------------------------------------------------------------------------------------------------------------
Offer A..........................      $11,000  Domestic end product, small business.
Offer B..........................       10,700  Domestic end product, large business.
Offer C..........................       10,000  Foreign end product (noneligible).
----------------------------------------------------------------------------------------------------------------

    Analysis: This acquisition is for end products for use in the 
United States. The Buy American Act applies. Therefore, all foreign end 
products are noneligible. Perform the steps in 25.502(a) . Since the 
low domestic offer, Offer B, is from a large business, apply the 6 
percent factor to Offer C. The resulting evaluated price of $10,600 
remains lower than Offer B. The cost of Offer B is; therefore, 
unreasonable. Award on Offer C at $10,000 (see 25.502(c)(4)(i)).
    (b) Example 2.

----------------------------------------------------------------------------------------------------------------
Offer A..........................      $11,000  Domestic end product, small business.
Offer B..........................       10,700  Domestic end product, large business.
Offer C..........................       10,200  Foreign end product (noneligible).
----------------------------------------------------------------------------------------------------------------

    Analysis: This acquisition is for end products for use outside the 
United States. Therefore, the Balance of Payments Program applies and 
the Buy American Act does not. Apply the 50 percent factor to Offer C. 
The evaluated price of $15,300 exceeds the price of Offer B . Award on 
Offer B (see 25.502(c)(4)(ii)).

[[Page 51654]]

25.504-2  Trade Agreements Act/Caribbean Basin Trade Initiative/NAFTA.

    (c) Example 3.

----------------------------------------------------------------------------------------------------------------
Offer A..........................     $204,000  U.S. made end product (not domestic).
Offer B..........................      203,000  U.S. made end product, small business (domestic).
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 whether 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  Other trade agreements.

    (a) Example 4.

----------------------------------------------------------------------------------------------------------------
Offer A..........................     $105,000  Domestic end product, small business.
Offer B..........................      100,000  Eligible product.
----------------------------------------------------------------------------------------------------------------

    Analysis: Since the offer is an eligible offer, award on the low 
offer (see 25.502(c)(1)).
    (b) Example 5.

----------------------------------------------------------------------------------------------------------------
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 noneligible offer can be considered. Since no 
domestic offer was received, make a nonavailability determination and 
award on Offer B (see 25.502(c)(2)).
    (c) Example 6. 

----------------------------------------------------------------------------------------------------------------
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 noneligible offer can be considered. 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.

Key:
DO=Domestic end product
EL=Eligible product
NEL=Noneligible product
    (a) Example 7. 

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

    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 6% 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 6% 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:

[[Page 51655]]



----------------------------------------------------------------------------------------------------------------
                                                                            Offers
                                            --------------------------------------------------------------------
                    Item                                                    Tentative award
                                                      Low offer            patterns from  A            C
                                                                                 and B
----------------------------------------------------------------------------------------------------------------
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
                                                                                     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%). The remaining items are evaluated 
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 8. 

----------------------------------------------------------------------------------------------------------------
                                                                                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 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%). 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 (58 FR 
3116, May 28, 1993) pursuant to Section 305(g)(1) of the Trade 
Agreements Act of 1979, as amended (19 U.S.C. 2515(g)(1)), on European 
Union (EU) states (sanctioned EU member states) that discriminate 
against U.S. products or services. This subpart does not apply to 
contracts for supplies or services awarded and performed outside of the 
United States or its territories, or to the Department of Defense. For 
thresholds unique to individual agencies (e.g., the Power Marketing 
Administration of the Department of Energy), see agency regulations.


25.601  Policy.

    (a) Except as provided in 25.602, agencies shall 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

[[Page 51656]]

    (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, K019);
    (B) Dredging (Y216, 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, 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, V251);
    (J) Investigation and security services (S206, S211, R423);
    (K) Education and training services (all U codes, R419);
    (L) Health and social services (all O codes, all G codes);
    (M) Recreational, cultural, and sporting services (G003); or
    (N) Telecommunication 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 by 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.
    (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 a determination is made in accordance with paragraph 
(b)(1) of this section, the agency shall notify the U.S. Trade 
Representative within 30 days after contract award.

Subpart 25.7--Prohibited Sources


25.701  Restrictions.

    (a) The Government does not acquire supplies or services that 
cannot be imported lawfully into the United States. Therefore, agencies 
and their contractors and subcontractors shall 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 (Executive Order 13067).
    (b) Agencies and their contractors and subcontractors shall not 
acquire any supplies or services from entities controlled by the 
Government of Iraq (Executive Orders 12722 and 12724).


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, D.C. 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 manner in which offers from foreign entities are 
evaluated 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 shall--
    (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) Many international agreements are compiled in the ``United 
States Treaties and Other International Agreements'' series published 
by the Department of State. Copies of this publication are normally 
available in overseas legal offices and U.S. diplomatic missions.
    (c) Contracting officers shall 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 shall 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

[[Page 51657]]

Harmonized Tariff Schedule (see 19 CFR 10.102 through 10.104, 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 shall 
cite this authority on the appropriate customs form when making such 
purchases (see 19 CFR 10.59 through 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), implements 10 U.S.C. 2313 and 41 U.S.C. 254d. 
The basic clause authorizes examination of records by the Comptroller 
General.
    (1) The contracting officer shall use the basic clause, whenever 
possible, in negotiated contracts with foreign contractors.
    (2) The contracting officer may use the clause with its Alternate 
III in contracts with foreign contractors 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 
shall--
    (1) Identify the contract and its purpose, and whether it is a 
contract with a foreign contractor or with a foreign government or 
agency thereof;
    (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 clause with its Alternate III.


25.1002  Use of foreign currency.

    (a) Unless a specific currency is required by international 
agreement or by the Trade Agreements Act (see 25.408(a)(3)), 
contracting officers shall 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 submission of offers in other than a specified currency is 
permitted, the contracting officer shall convert the offered prices to 
U.S. currency for evaluation purposes. The contracting officer shall 
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; or
    (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 shall 
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) The contracting officer shall--
    (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, when none of the clauses 
prescribed in paragraphs (b) and (c) of this section apply, except 
when--
    (i) The solicitation is restricted to domestic end products in 
accordance with subpart 6.3;
    (ii) The acquisition is for supplies to be used 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 to be used 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) The contracting officer shall--
    (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 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 
(25.406), see agency regulations.
    (ii) If the acquisition 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) The contracting officer shall--
    (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. If the 
agency has not made such a determination, the contracting officer shall 
follow agency procedures.
    (2) Insert the provision at 52.225-6, Trade Agreements Certificate, 
in solicitations containing the clause at 52.225-5.
    (d) The contracting officer shall 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).
    (e) The contracting officer shall 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

[[Page 51658]]

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, paragraphs 
(b)(1) and (i)(2) of the clause may be modified to reduce the dollar 
figure.


25.1102  Acquisition of construction.

    The contracting officer shall--
    (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. If specified 
in agency regulations, substitute a 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 before receipt of offers, use the provision with its 
Alternate I.
    (c)(1) 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. If specified 
in agency regulations, substitute a higher evaluation percentage in 
paragraph (b)(4)(i) of the clause.
    (2) 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. The contracting 
officer shall insert the clause at 52.225-13, Restrictions on Certain 
Foreign Purchases, in solicitations and contracts with a value 
exceeding $2,500.
    (b) Translations. The contracting officer shall insert the clause 
at 52.225-14, Inconsistency Between English Version and Translation of 
Contract, in solicitations and contracts where translation into another 
language is anticipated.
    (c) Sanctions. (1) Except as provided in paragraph (c)(2) of this 
section, the contracting officer shall 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) The clauses in paragraph (c)(1) of this section shall not be 
used in--
    (i) Solicitations issued and contracts awarded by a contracting 
activity located outside of the United States or its territories, 
provided the supplies will be used or the services performed outside of 
the United States or its territories;
    (ii) Purchases at or below 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 where the head of the agency has made a 
determination in accordance with 25.602(b).
    (d) Foreign currency offers. The contracting officer shall--
    (1) Insert the provision at 52.225-17, Evaluation of Foreign 
Currency Offers, in solicitations that permit the use of other than a 
specified currency; and
    (2) Insert in the provision the source of the rate to be used in 
the evaluation of offers.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    14. Section 52.212-3 is amended 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 (Date)

* * * * *
    (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 entitled ``Buy American Act--
Balance of Payments Program--Supplies'' and that components of 
unknown origin have been considered 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) Offers will be evaluated 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 Implementation Act--Israeli Trade Act--Balance of Payments 
Program,'' and that components of unknown origin have been 
considered 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

[[Page 51659]]

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) Offers will be evaluated 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 (DATE). 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 (DATE). 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.

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

County of Origin

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

(List as necessary)

    (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 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)

    (iii) Offers will be evaluated in accordance with the policies 
and procedures of FAR Part 25. For line items subject to the Trade 
Agreements Act, offers of U.S. made, designated country, Caribbean 
Basin country, or NAFTA country end products will be evaluated 
without regard to the restrictions of the Buy American Act or the 
Balance of Payments Program. Only offers of U.S. made, designated 
country, Caribbean Basin country, or NAFTA country end products will 
be considered for award 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.
* * * * *
    15. Section 52.212-5 is amended by revising the clause date; at the 
end of paragraph (a)(1) by removing ``; and''; at the end of paragraph 
(a)(2) by removing the period and inserting ``; and''; by adding 
paragraph (a)(3); and by revising paragraphs (b)(11) through (b)(16) 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 (Date)

    (a) * * *
    (3) 52.225-13, Restrictions on Certain Foreign Purchases (E.O.'s 
12722, 12724, 13059, and 13067).
    (b) * * *
    ____ (11) 52.225-1, Buy American Act--Balance of Payment 
Program--Supplies (41 U.S.C. 10a-10d).
    ____ (12)(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.
    ____ (13) 52.225-5, Trade Agreements (19 U.S.C. 2501 et seq., 19 
U.S.C. 3301 note).
    ____ (14) 52.225-15, Sanctioned European Union Country End 
Products (E.O. 12849).
    ____ (15) 52.225-16, Sanctioned European Union Country Services 
(E.O. 12849).
    ____ (16) [Reserved]
* * * * *
    16. Section 52.213-4 is amended by revising the date of the clause; 
and paragraph (a)(2)(i) and 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) (Date)

    (a) * * *
    (2) * * *
    (i) 52.225-13, Restrictions on Certain Foreign Purchases (DATE).
* * * * *
    (b) * * *
    (1) * * *
    (viii) 52.225-1, Buy American Act--Balance of Payments Program--
Supplies (DATE) (41 U.S.C. 10a-10d) (Applies to supplies, and 
services involving the furnishing of supplies, if the contract--
    (A) Does not exceed $25,000; or
    (B) Is set aside for small business concerns, regardless of 
dollar value).
* * * * *
    17. Section 52.214-34 is amended by revising the introductory 
paragraph to read as follows:


52.214-34  Submission of Offers in the English Language.

    As prescribed in 14.201-6(x), insert the following provision:
* * * * *
    18. Section 52.214-35 is amended by revising the introductory text 
to read as follows:


52.214-35  Submission of Offers in U.S. Currency.

    As prescribed in 14.201-6(y), insert the following provision:
* * * * *
    19. Section 52.215-1 is amended by revising the date of the 
provision and paragraph (c)(5) to read as follows:


52.215-1  Instructions to Offerors--Competitive Acquisitions.

* * * * *
    (c) * * *
    (5) Proposals submitted in response to this solicitation shall 
be in English unless otherwise permitted by the solicitation and 
shall be in U.S. dollars, unless the provision at FAR 52.225-17, 
Evaluation of Foreign Currency Offers, is included in the 
solicitation.
* * * * *
    20. Sections 52.225-1 through 52.225-17 are revised to read as 
follows:

[[Page 51660]]

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.
* * * * *

Subpart 52.2--Text of Provisions and Clauses


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 (Date)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
incorporated directly into the end products.
    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 those articles, materials, and supplies to be 
acquired under the contract for public use.
    Foreign end product means an end product other than a domestic 
end product.
    (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 will be treated 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 (Date)

    (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 
components of unknown origin have been considered 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.
    (b) Foreign End Products:

Line Item No.

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

Country of Origin

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

(List as necessary)

    (c) Offers will be evaluated 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 (Date)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
incorporated directly into the end products.
    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 those articles, materials, and supplies to be 
acquired under the contract for public use.
    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 (NAFTA) country means Canada 
or Mexico.
    NAFTA country end product means an article that--
    (1) Is wholly the growth, product, or manufacture of a 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

[[Page 51661]]

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.
    (b) Components of foreign origin. Offerors may obtain from the 
Contracting Officer a list of foreign articles that will be treated 
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.'' An offer specifying that a NAFTA country end product 
or an Israeli end product will be supplied requires the Contractor 
to 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 (DATE). 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 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.'' An offer specifying 
that a Canadian end product will be supplied requires the Contractor 
to supply a Canadian end product or, at the Contractor's option, a 
domestic end product.
    Alternate II (DATE). 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.'' An offer specifying that a Canadian end product or an 
Israeli end product will be supplied requires the Contractor to 
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 (Date)

    (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 components of 
unknown origin have been considered 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) Offers will be evaluated in accordance with the policies and 
procedures of Part 25 of the Federal Acquisition Regulation.

(End of provision)

    Alternate I (DATE). 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 (DATE). 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.''

[[Page 51662]]

    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 (Date)

    (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
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 those articles, materials, and supplies to be 
acquired under the contract for public use.
    North American Free Trade Agreement (NAFTA) country means Canada 
or Mexico.
    NAFTA country end product means an article that--
    (1) Is wholly the growth, product, or manufacture of a 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.
    U.S. made end product means an article that has been 
manufactured in the United States or that has been 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 (Date)

    (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.

----------------------------------------------------------------------


[[Page 51663]]

-----------------------------------------------------------------------
----------------------------------------------------------------------

----------------------------------------------------------------------

Country of Origin

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

(List as necessary)

    (c) Offers will be evaluated in accordance with the policies and 
procedures of Part 25 of the Federal Acquisition Regulation. For 
line items subject to the Trade Agreements Act, offers of U.S. made, 
designated country, Caribbean Basin country, or NAFTA country end 
products will be evaluated without regard to the restrictions of the 
Buy American Act or the Balance of Payments Program. Only offers of 
U.S. made, designated country, Caribbean Basin country, or NAFTA 
country end products will be considered for award 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 
(Date)

    (a) 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, Canada, Denmark, 
Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, 
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 (Date)

    (a) 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.
    (b) Except as provided in paragraph (c) 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 for incorporation into end 
products. The notice shall be furnished to the Contracting Officer 
at least 20 calendar days before the importation and shall identify 
the--
    (i) Foreign supplies;
    (ii) Estimated amount of duty; and
    (iii) Country of origin.
    (2) The Contracting Officer shall determine whether any of these 
supplies should be accorded duty-free entry and shall notify the 
Contractor within 10 calendar days after receipt of the Contractor's 
notification.
    (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.
    (c) Notification under paragraph (b) of this clause is not 
required 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.
    (d) 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 
non-Governmental use.
    (e) The Government shall execute any required duty-free entry 
certificates for supplies to be accorded duty-free entry and shall 
assist the Contractor in obtaining duty-free entry for these 
supplies.
    (f) 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 
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.
    (g) The Contractor shall instruct the foreign supplier to--
    (1) Consign the shipment as specified in paragraph (f) 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.
    (h) 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).
    (i) 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 
(Date)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
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 item brought to the site preassembled from articles, materials, 
or supplies. However,

[[Page 51664]]

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, shall be evaluated as a single and distinct 
construction material regardless of when or how the individual parts 
or components of such systems are delivered to the construction 
site.
    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.
    (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. Only 
domestic construction material shall 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 construction material 
or components listed by the Government as follows:

----------------------------------------------------------------------
[Contracting Officer to list applicable excepted 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 of domestic construction material would be 
unreasonable. The cost of a particular domestic construction 
material subject to the requirements of the Buy American Act shall 
be determined to be 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, a factor of 50 percent shall be used;
    (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 description of 
the foreign and domestic construction materials, unit of measure, 
quantity, price, time of delivery or availability, location of the 
construction project, name and address of the proposed supplier, and 
a detailed justification of the reason for use of foreign 
construction materials cited in accordance with paragraph (b)(3) of 
this clause. 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. 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).
    (ii) Any Contractor request for a determination submitted after 
contract award 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.
    (2) If the Government determines after contract award that an 
exception to the Buy American Act or Balance of Payments Program 
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) Unless the Government determines that an exception to the 
Buy American Act or Balance of Payments Program applies, use of 
foreign construction material shall be considered noncompliant with 
the Buy American Act or Balance of Payments Program.
    (d) Data to be supplied. 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
------------------------------------------------------------------------
                                     Unit of                    Price
Construction material description    measure      Quantity    (dollars)*
------------------------------------------------------------------------
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.
* 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)


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 (Date)

    (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 information and applicable 
supporting data required by paragraphs (c) and (d) of the clause at 
FAR 52.225-9 shall be included in the request. If an offeror has not 
requested a

[[Page 51665]]

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 information and 
supporting data shall be included 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 has 
requested the substitution of foreign construction material based on 
unreasonable cost and an offeror that has not requested such an 
exception, the Contracting Officer shall award to the offeror that 
has not requested 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 to apply.
    (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) Shall 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 (DATE). 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 (Date)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
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 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, shall be evaluated as a 
single and distinct construction material regardless of when or how 
the individual parts or components of such systems are delivered to 
the construction site.
    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 (NAFTA) country means Canada 
or Mexico.
    NAFTA country construction material means a construction 
material that--
    (1) Is wholly the growth, product, or manufacture of a 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.
    (b) Construction materials. (1) This clause implements the Buy 
American Act (41 U.S.C.

[[Page 51666]]

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) Only domestic, designated country, or NAFTA country 
construction material shall be used 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:

Contract---------------------------------------------------------------
[Contracting Officer to list applicable excepted 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 of domestic construction material would be 
unreasonable. The cost of a particular domestic construction 
material subject to the restrictions of the Buy American Act shall 
be determined to be 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, a factor of 50 percent shall be used;
    (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 description of 
the foreign and domestic construction materials, unit of measure, 
quantity, price, time of delivery or availability, location of the 
construction project, name and address of the proposed supplier, and 
a detailed justification of the reason for use of foreign 
construction materials cited in accordance with paragraph (b)(4) of 
this clause. 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. 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).
    (ii) Any Contractor request for a determination submitted after 
contract award 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 .
    (2) If the Government determines after contract award that an 
exception to the Buy American Act or Balance of Payments Program 
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) Unless the Government determines that an exception to the 
Buy American Act or Balance of Payments Program applies, use of 
foreign construction material shall be considered noncompliant with 
the Buy American Act or Balance of Payments Program.
    (d) Data to be supplied. 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
------------------------------------------------------------------------
                                     Unit of                    Price
Construction material description    measure      Quantity    (dollars)*
------------------------------------------------------------------------
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.
*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 (DATE). As prescribed in 25.1102(c)(2), 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) Only domestic or NAFTA country construction material shall 
be used 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 (Date)

    (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 information and applicable 
supporting data required by paragraphs (c) and (d) of the clause at 
FAR 52.225-11 shall be included 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 
information and supporting data shall be included 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

[[Page 51667]]

to the offered price the appropriate percentage of the cost of such 
foreign construction material, as specified in paragraph (b)(4)(i) 
of the clause at FAR 52.225-11.
    (2) If evaluation results in a tie between an offeror that has 
requested the substitution of foreign construction material based on 
unreasonable cost and an offeror that has not requested such an 
exception, the Contracting Officer shall award to the offeror that 
has not requested 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 the clause at FAR 
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 the clause at FAR 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 to apply.
    (3) If the Government determines that a particular exception 
requested in accordance with paragraph (c) of the clause at FAR 
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) Shall 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 (DATE). As prescribed in 25.1102(d)(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-
11.


52.225-13   Restrictions on Certain Foreign Purchases.

    As prescribed in 25.1103(a), insert the following clause:

Restrictions on Certain Foreign Purchases (Date)

    (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 
(Date)

    In the event of inconsistency between any terms of this contract 
and any translation thereof 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)(1)(i), insert the following clause:

Sanctioned European Union Country End Products (Date)

    (a) Definitions. As used in this clause--
    Sanctioned European Union (EU) country end product means an 
article that--
    (1) Is wholly the growth, product, or manufacture of a 
sanctioned 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 EU 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 EU country 
end products under this contract.

(End of clause)


52.225-16   Sanctioned European Union Country Services.

    As prescribed in 25.1103(c)(1)(ii), insert the following clause:

Sanctioned European Union Country Services (Date)

    (a) Definition. Sanctioned European Union (EU) member state 
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 EU 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 (Date)

    If offers are received in more than one currency, offers shall 
be evaluated 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; or
    (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 final proposal 
revisions.

(End of provision)


52.225-18   52.225-22   [Removed]

    21. Sections 52.225-18 through 52.225-22 are removed.

[FR Doc. 98-25528 Filed 9-25-98; 8:45 am]
BILLING CODE 6820-EP-P