[Federal Register Volume 85, Number 178 (Monday, September 14, 2020)]
[Proposed Rules]
[Pages 56558-56569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20116]
[[Page 56558]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 25, and 52
[FAR Case 2019-016; Docket No. FAR-2019-0016, Sequence No. 1]
RIN 9000-AN99
Federal Acquisition Regulation: Maximizing Use of American-Made
Goods, Products, and Materials
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement an Executive order (E.O.)
addressing domestic preferences in Government procurement.
DATES: Interested parties should submit written comments at the address
shown below on or before November 13, 2020 to be considered in the
formation of the final rule.
ADDRESSES: Submit comments in response to FAR Case 2019-016 to http://www.regulations.gov. Submit comments via the Federal eRulemaking portal
by searching for ``FAR Case 2019-016''. Select the link ``Comment Now''
that corresponds with ``FAR Case 2019-016.'' Follow the instructions
provided on the screen. Please include your name, company name (if
any), and ``FAR Case 2019-016'' on your attached document. If your
comment cannot be submitted using https://www.regulations.gov, call or
email the points of contact in the FOR FURTHER INFORMATION CONTACT
section of this document for alternate instructions.
Instructions: Please submit comments only and cite ``FAR Case 2019-
016'' in all correspondence related to this case. All comments received
will be posted without change to http://www.regulations.gov, including
any personal and/or business confidential information provided. To
confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission
to verify posting.
FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement
Analyst, at 202-969-7207 or [email protected] for clarification
of content. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat Division at 202-501-4755
or [email protected]. Please cite FAR Case 2019-016.
SUPPLEMENTARY INFORMATION:
I. Background
Congress passed the Buy American Act during the Great Depression to
foster American industry by protecting it from foreign competition for
Federal procurement contracts. The Buy American Act is codified at 41
U.S.C. Chapter 83 as the Buy American statute and provides pricing
preferences to offerors who certify their compliance with the domestic
purchasing requirements stated in the Act. Specifically, it requires
public agencies to procure articles, materials, and supplies that were
mined, produced, or manufactured in the United States, substantially
all from domestic components, subject to exceptions for nonavailability
of domestic products, unreasonable cost of domestic products, and when
it would not be in the public interest to buy domestic products.
The key to understanding the Buy American statute, which is
implemented in FAR part 25, is determining whether the solicited goods
or ``end products'' or ``construction material'' are domestic, i.e.,
were mined, produced, or manufactured in the United States,
substantially from components mined, produced, or manufactured in the
United states. The analysis of whether a manufactured end product or
construction material qualifies as domestic is done using a two-part
test.
1. The end product or construction material must be manufactured in
the United States.
2. More than 50 percent of all component parts (determined by cost
of the components) must also be mined, produced, or manufactured in the
United States.
The factor of 50 percent in the existing FAR definition came from
E.O. 10582, Prescribing Uniform Procedures for Certain Determinations
under the Buy American Act, available via the internet at https://www.archives.gov/federal-register/codification/executive-order/10582.html. E.O. 10582 interpreted the statutory requirement that
domestic products must be manufactured ``substantially all'' from
domestic components as meaning in excess of 50 percent. If a product
meets this two-part test, then it can be considered a ``domestic end
product'' or ``domestic construction material'' under the Buy American
statute. End products or construction material that do not qualify as
domestic under this test are treated as foreign.
The Buy American statute is waived in situations where the United
States has reciprocal trade agreements, including the World Trade
Organization Government Procurement Agreement (WTO GPA). Generally, the
dollar value of the acquisition determines which of the trade
agreements applies. Exceptions to the applicability of the trade
agreements are described in FAR subpart 25.4. The FAR clauses
implementing the Trade Agreements Act allow the Government to purchase
end items that are ``substantially transformed'' in countries that are
parties to such trade agreements without regard to the source or cost
of the components. On acquisitions under the WTO GPA, end products that
are ``substantially transformed'' in the United States are considered
``U.S.-made end products'' and they are not subject to the Buy American
statute or E.O. 13881.
On July 15, 2019, the President signed E.O. 13881, Maximizing Use
of American-Made Goods, Products, and Materials (84 FR 34257, July 18,
2019). This E.O. changes FAR clauses implementing the Buy American
statute by increasing the--
1. Domestic content requirements; and
2. Price preference for domestic products.
Increased Domestic Content Requirements
Under E.O. 13881, the domestic content requirement for iron and
steel end products increases to 95 percent. For everything else, the
domestic content requirement increases from 50 percent to exceeds 55
percent of the cost of all components. E.O. 13881 creates a new
separate higher domestic content standard for iron and steel end
products. This distinction does not currently appear in the FAR clauses
implementing the Buy American statute. But it has been around for many
years in domestic preference requirements governing certain federal
grant programs, such as the Federal Transit Administration's Buy
America regulations applicable to grantees. DoD procurements are
affected by the increased domestic content requirements of E.O. 13881;
the changes will be implemented in the Defense Federal Acquisition
Regulation Supplement (DFARS) through DFARS Case 2019-D045, Maximizing
Use of American-Made Goods.
[[Page 56559]]
Increase Preference for Domestic Offers
The Buy American statute does not prohibit the purchase of foreign
end products or use of foreign construction material. Instead, it
encourages the use of domestic end products and construction material
by imposing a price preference for domestic end products and
construction material. Under current Buy American regulations, large
businesses receive a 6 percent price preference. Small businesses get a
12 percent price preference. For DoD procurements, the price preference
for end products from both large and small businesses is 50 percent.
The 6 percent price preference was originally established by E.O.
10582, which permitted the head of an executive agency to determine
that a greater differential is appropriate. In October 1958, the
Assistant Secretary of Defense (Supply and Logistics) and the Assistant
Secretary of State agreed that a differential of 12 percent would be
used for offers from small business (see Armed Services Procurement
Regulation (ASPR), 1955 edition, Revision 45, 20 April 1959, Case 58-
99).
E.O. 13881 increases the price preference from 6 percent to 20
percent for large businesses and from 12 percent to 30 percent for
small businesses. The E.O. does not impact the 50 percent preference
for DoD procurements, because the DoD percentage exceeds the
requirements of the E.O.
II. Discussion and Analysis
A. Applicability of the Executive Order 13881 to Construction Material
Although the E.O. addresses only ``end products'' in section 2, the
Councils have interpreted the term ``end product'' in the E.O. to
include ``construction material.'' The E.O. doesn't define the term end
product, but in both the title and section 1, addresses maximizing the
use of American-made goods, products, and materials, not just end
products. Furthermore, section 3 of the E.O. states that it will
supersede section 2(a) of E.O. 10582, which addressed ``materials,''
and has been interpreted in the FAR to cover both end products and
construction materials. In addition, the policy relating to iron and
steel products has primary impact on the acquisition of construction
materials. The Recovery Act applied the restrictions on acquisition of
domestic iron and steel products solely to construction materials (see
FAR subpart 25.6). Not addressing construction material in this rule
would be contrary to the goal of the E.O. to maximize the use of
American-made products.
B. Definitions
1. This rule proposes to amend the definitions of ``domestic
construction material'' and ``domestic end product'' at FAR 25.003 and
in the applicable clauses at FAR 52.225-1, 52.225-3, 52.225-9, and
52.225-11, and references at FAR 52.212-3(f)(1) and (g)(1)(iii),
52.225-2(a), and 52.225-4(c), as well as the policy discussion of these
definitions at FAR 25.001(c)(1), 25.101(a)(2), and 25.201(b), to
include the new E.O. requirement that for ``domestic construction
material'' or a ``domestic end product'' that does not consist wholly
or predominantly of iron or steel or a combination of both, the cost of
domestic components must exceed 55 percent of the cost of all
components.
2. A new paragraph is added in each definition to address end
products or construction materials that consist wholly or predominantly
of iron or steel or a combination of both, respectively, to require
that the cost of iron and steel not produced in the United States as
estimated in good faith by the contractor, must constitute less than 5
percent of the cost of all components. This addition to the definitions
was derived and integrated with existing FAR coverage as follows:
a. Iron and steel end product means an end product or construction
material that consists wholly or predominantly of iron or steel or a
combination of both.
b. Predominantly of iron or steel or a combination of both means
the cost of the iron and steel content in an item that exceeds 50
percent of the total cost of all its components. Basing the
predominance on cost, rather than weight, is consistent with the
requirement of the E.O. that the foreign iron and steel content be
limited to less than 5 percent of the cost of all components.
c. Foreign iron and steel means iron and steel not produced in the
United States. This is consistent with the definition of ``foreign iron
and steel'' under the Recovery Act (see FAR 25.602-1(a)(1)(ii)).
d. When addressing construction materials or end products that are
wholly or predominantly iron or steel or a combination of both, it is
unnecessary to address unmanufactured construction material or
unmanufactured end products, respectively, because the Government does
not buy unmanufactured iron and steel end products and construction
materials.
e. ``Produced in the United States'' is taken from FAR subpart
25.6, and applies to the iron and steel in construction material and
end products that consist wholly or predominantly of iron or steel or a
combination of both.
f. The definition of ``steel'' is taken from FAR subpart 25.6.
g. Because of the difficulty of estimating the cost of all foreign
iron and steel content, the rule proposes a good faith estimate by the
contractor, with the exception of fasteners, which, as explained in
section II.C., are defined and treated separately.
h. The requirement that components of unknown origin be treated as
foreign has been incorporated into the definitions of ``domestic end
product'' and ``domestic construction material'' for those items that
do not consist wholly or predominantly of iron or steel or a
combination of both. This requirement is comparable to the other
requirements already in the definition such as the treatment of
domestically nonavailable components and scrap generated in the United
States as domestic. This makes it clearer that this is only applicable
to items that do not consist wholly or predominantly of iron or steel
or a combination of both.
i. The rule revises the term ``component test'' to ``domestic
content test,'' which can apply to either the component content of
other than iron or steel products test, or the iron and steel content
of iron or steel products, as applicable. With regard to manufactured
supplies and materials (whether end products or construction
materials), the Buy American statute requires that in order to be
considered domestic, such materials and supplies shall have been
manufactured in the United States ``substantially all from articles,
materials, or supplies mined produced, or manufactured in the United
States.''
E.O. 10582 interpreted this requirement by stating that materials
shall be considered to be of foreign origin if the cost of foreign
products used in such materials constitutes 50 percent or more of the
cost of all the products used in such materials. When incorporated into
the FAR, the term ``component'' was substituted for the term
``product'' and this has been referred to as the ``component test''.
Although E.O. 13881 retains similar language with regard to end
products other than iron and steel end products, just changing the
percentage from 50 percent to 45 percent, E.O. 13881 does not reference
the term ``product'' when referring to the cost of iron and steel used
in iron and steel end products. It states that ``the cost of foreign
iron and steel used in such iron and steel end products constitutes 5
percent or more of the cost of all the products used in such iron and
steel end products.'' Thus, the test for iron and steel is no
[[Page 56560]]
longer a ``component test'' but a test of the cost of iron and steel
content.
C. Partial Reinstatement of the Domestic Content Test of the Buy
American Statute for Iron and Steel Products
In 2009, the Administrator for Federal Procurement Policy waived
what is now called the domestic content test (previously called the
component test) for commercially available off-the-shelf (COTS) items
based on a determination made pursuant to 41 U.S.C. 1907. See FAR Case
2000-305, January 15, 2009, 74 FR 2713. Furtherance of the Buy American
statute was driven by retention of the requirement that the product
must still be manufactured in the United States.
The proposed rule would partially restore the domestic content test
for COTS items as it pertains to iron and steel products. The bulk of
iron and steel products acquired by the Government are primarily COTS
items, used as construction material. Roll-back of the waiver is
necessary to give full effect to the E.O.'s requirement that domestic
iron and steel products shall not contain more than 5 percent foreign
iron and steel.
At the same time, the proposed rule would continue to waive the
domestic content test for iron and steel fasteners. Fastener is defined
as a hardware device that mechanically joins or affixes two or more
objects together. Examples of fasteners are nuts, bolts, pins, rivets,
nails, clips, and screws. Fasteners are generally so small, inexpensive
and comingled that trying to keep track of the origin of all fasteners
would create an administrative burden that would outweigh any benefit
to the American iron and steel industrial base. The proposed partial
reinstatement of the domestic content test for products that consist
wholly or predominantly of iron or steel or a combination of both would
require changes to the list of inapplicable laws at FAR 12.505(a), the
definitions of ``domestic construction material'' and ``domestic end
product,'' and various other conforming changes wherever waiver of the
now domestic content test is mentioned (FAR 25.001(c)(1), 25.100(a)(4),
25.101(a)(2), 25.200(a)(4), 25.201(b)(2), 52.225-1(b), 52.225-3(c),
52.225-9(b), and 52.225-11(b)).
D. Evaluation Factor for Determination of Unreasonable Cost
The new E.O. also increases the evaluation factors to be applied to
offers of foreign end products or construction material when
determining whether the cost of offered domestic end products or
construction material is unreasonable. For acquisitions of end
products, the factor of 20 percent is to be applied to a foreign offer
if the potential domestic awardee is other than a small business, and a
30 percent factor is to be applied if the potential awardee would be a
small business (see FAR 25.105(b), 25.204, 25.502(c), 25.604, 25.605,
52.225-9(b)(3)(i), 52.225-11((b)(4)(i), and the Recovery Act clauses at
52.225-21 through 52.225-24). Consistent with current FAR coverage for
acquisitions of foreign construction material under a construction
contract, the higher preference for small businesses is inapplicable,
because under a construction contract, there are not separately
identifiable offers on each item of construction material, but it is
part of an overall bid on the project. The foreign material is
evaluated on the basis of market research, not a specific competing
offer. Thus, only the 20 percent factor would be applied to
construction material.
E. Applicability to Acquisitions Funded by the Recovery Act
Projects funded with monies from section 1605 of the American
Recovery and Reinvestment Act of 2009 (the Recovery Act) (Pub. L. 111-
5) are subject to more stringent requirements for use of domestic
manufactured construction material, particularly iron and steel (see
FAR subpart 25.6). The Recovery Act restrictions apply only to
construction projects using funds appropriated under that Act. Most of
those funds have now been obligated and expended, and there is very
little continued applicability of these regulations.
The Recovery Act does not apply to unmanufactured construction
material, which is therefore still covered by the Buy American statute.
The increased requirements of the new E.O. for domestic content for
manufactured construction material are therefore inapplicable to
acquisitions under the Recovery Act.
However, the 20 percent factor that applies to construction
contracts covered by the Buy American statute, only applies to the
unmanufactured construction material of a construction contract
otherwise covered by the Recovery Act. Accordingly, the 6 percent
factor is revised to 20 percent at FAR 25.604(c)(2) and 25.605 and in
the following Recovery Act provisions and clause:
52.225-21, Required Use of American Iron, Steel, and Manufactured
Goods--Buy American Statute--Construction Materials.
52.225-22, Notice of Required Use of American Iron, Steel, and
Manufactured Goods--Buy American Statute--Construction Materials.
52.225-23, Required Use of American Iron, Steel, and Manufactured
Goods--Buy American Statute--Construction Materials Under Trade
Agreements.
52.225-24, Notice of Required Use of American Iron, Steel, and
Manufactured Goods--Buy American Statute--Construction Materials Under
Trade Agreements.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This proposed rule does not add any new provisions or clauses, nor
change the applicability of existing provisions or clauses to contracts
at or below the SAT and contracts for the acquisition of commercial
items, including COTS items.
However, this rule does propose to apply the domestic content test
of the Buy American statute, as implemented by E.O. 13881, to COTS
items that consist wholly or predominantly of iron and steel (excluding
fasteners). In accordance with 41 U.S.C. 1907, since 2008, the domestic
content test of the Buy American statute has been waived for COTS
items, in part due to the complexity and cost of keeping track of
components in a world of global sourcing where the Government is not a
market driver. However, the domestic content test for the iron and
steel items does not require tracking of all components, only a good
faith assurance that not more than 5 percent of the iron and steel
content is foreign. In addition, absent restoration of the domestic
content test, the E.O. 13881 requirement with regard to iron and steel
construction material would have very little effect.
As explained above, the domestic content waiver for COTS items
would continue to apply to iron and steel fasteners, such as nuts,
bolts, pins, rivets, nails, clips, and screws, which are generally so
small, inexpensive and comingled that trying to keep track of the
origin of all fasteners would create an administrative burden that
would outweigh any benefit to the American iron and steel industrial
base.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety
[[Page 56561]]
effects, distributive impacts, and equity). E.O. 13563 emphasizes the
importance of quantifying both costs and benefits, of reducing costs,
of harmonizing rules, and of promoting flexibility. This is a
significant regulatory action and, therefore, was subject to review
under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated
September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
V. Expected Impact of the Proposed Rule
The current FAR clauses implementing the Buy American statute apply
to a narrow set of procurements. Also, because the FAR Council is
leaving the COTS items exception in place for most COTS items, the
heightened domestic content requirements will not be applicable to
those procurements.
When this rule is implemented, domestic industries supplying
domestic end products are likely to benefit from a competitive
advantage. Based on the E.O., it is unclear if the pool of qualified
suppliers would be reduced, resulting in less competition (and a
possible increase in prices that the Government will pay to procure
these products).
At least three arguments point to the possibility that any
increased burden, on contractors in particular, could be small if not
de minimis: (1) Familiarization costs should be low, (2) some, if not
many, contractors may already be able to meet the more stringent
threshold, and (3) costs incurred by contractors who adjust their
supply chains so that their end products qualify as domestic will enjoy
a larger price preference that should help to offset these costs over
time. Each of these arguments is explained below.
First, DoD, GSA, and NASA do not anticipate significant cost from
contractor familiarization with the rule given the history of
rulemaking and E.O.s in this area. The basic mechanics of the Buy
American statute (e.g., definitions, how and when the price preference
is used to favor domestic end products, certifications required of
offerors to demonstrate end products are domestic) remain unchanged and
continue to reflect processes that are decades old.
Second, some, if not many, contractors may already be able to
comply with the lower foreign content requirement needed to meet the
definition of domestic end product under E.O. 13881 and the proposed
rule. Laws such as the SECURE Technology Act, Public Law 115-390, which
requires a series of actions to strengthen the Federal infrastructure
for managing supply chain risks, are placing significantly increased
emphasis on Federal agencies and Federal Government contractors to
identify and reduce risk in their supply chains. One way to reduce
supply chain risk is to increase domestic sourcing of content. In
addition, in the context of iron and steel, many laws already in place
call for more stringent content. For example, the Recovery Act required
that all construction material for a project for the construction,
alteration, maintenance, or repair of a public building or a public
work in the United States, consisting wholly or predominantly of iron
or steel, had to be produced in the United States when using Recovery
Act funds, to the extent consistent with trade agreements (see FAR
25.602-1, implementing section 1605 of the Recovery Act). In addition,
Federal contractors who also work on contracts funded under Federal
grants may, in some cases, find that the steel, iron, and manufactured
goods used in the project be produced in the United States, as is the
case for certain funding administrated by the Federal Transit
Administration for public transportation projects (see 49 U.S.C.
5323(j)). Accordingly, it is possible that the Federal market for iron
and steel has already done significant retooling and could meet the
requirements of E.O. 13881 without too much additional effort.
Third, it is anticipated that some contractors' products and
construction materials may not meet the definition of domestic end
product and construction material unless the contractors take steps to
adjust their supply chains to increase the domestic content. Those
contractors that make a business decision not to modify their supply
chains will still be able to bid on Federal contracts but will no
longer enjoy a price preference. Those contractors that sell to
civilian agencies and retool their supply sources to meet the more
stringent threshold will have a more generous price preference applied
to their products--i.e., 20 percent generally under the new rule vs. 6
percent under the current rule; 30 percent if the seller is a small
business vs. 12 percent under the current rule. These stronger
preferences, which are designed as an incentive to encourage more
domestic sourcing, may help to offset costs of meeting the new
standards.
This rule has the potential to slightly increase the estimated
percentage of foreign offers. It can only impact products that are made
in the United States as follows: Iron or steel that has a content of 5
percent or more of foreign iron or steel; or other products, other than
COTS items, that have a content of 45 to 50 percent foreign components.
Offerors of such products have an option to increase the domestic
content and continue to offer domestic products, in which case they may
benefit from the increased preference for domestic products, or they
may choose to continue to offer the same product, which will now be
evaluated as foreign. We do not have any data on how many currently
domestic products would fall into this category. Nor do we have any
knowledge as to which option an offeror of such products would select.
With regard to the increased price preference for domestic offers, we
note that robust competition among vendors offering domestic products
will decrease the extent to which the Government could pay an
additional 20 to 30 percent for domestic products above and beyond the
cost of otherwise equivalent foreign products.
DoD, GSA, and NASA do not expect a significant cost impact on the
public but lack data to make a definitive determination and seek
information from the public to assist with this analysis. Feedback is
requested on the following questions:
(1) What industry do you represent? Are you a manufacturer or a
reseller?
(2) For manufacturers and resellers of end products other than iron
and steel--
(a) Do you currently meet the higher standards specified in the
proposed rule for a domestic end product or construction material or
would you have to make adjustments to your supply chain to meet the new
requirements?
(b) If you would have to make adjustments to your supply chain in
response to changes proposed here, do you plan to do so?
(c) If the answer to question (b) is yes, how much do you think it
will cost to make these changes, and to what extent do you believe this
cost will be offset by the increased preference applicable to purchases
by civilian agencies if you move toward products with higher domestic
content?
(3) For sellers of iron and steel, what, if any, adjustments do you
anticipate having to make to your supply chain to meet the new
requirements, and how much do acquisition costs vary between iron and
steel with less or equal than 95 percent domestic content, and greater
than 95 percent domestic content?
(4) Section 4 of E.O. 13881 directed consideration of the
``feasibility and desirability'' of further decreases in the threshold
percentage of foreign content allowed for an end product other than
[[Page 56562]]
iron or steel to be considered domestic from the 45 percent proposed in
this rule to 25 percent. Accordingly, DoD, GSA, and NASA encourage
manufacturers and resellers of end products other than iron and steel
to provide input on the feasibility and desirability of adopting this
more stringent standard by addressing the following--
(a) Could you currently meet a 25 percent foreign content
requirement for domestic end products or construction material or would
you have to make adjustments to your supply chain to do so?
(b) If you would have to make adjustments to your supply chain to
meet a 25 percent requirement, would you do so?
(c) If the answer to question (b) is yes, how much do you think it
would cost to come into compliance, how much would acquisition costs
for these materials rise, and to what extent do you believe this cost
would be offset by the increased preference applicable to purchases by
civilian agencies?
(d) Do you think it is preferable to work towards a 25 percent
threshold incrementally? If so, why and what incremental change would
you propose over what period of time?
VI. Executive Order 13771
DoD, GSA, and NASA do not expect this to be considered a regulatory
action under E.O. 13771, Reducing Regulation and Controlling Regulatory
Costs, because this rule is expected to have a de minimis burden impact
on the public (see section V of this preamble).
VII. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this rule 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 this rule does not impose new requirements just changes to the
existing percentages. This rule proposes to make adjustments to the
required percentage of domestic content and the existing percentages
for the price evaluation preferences in an effort to decrease the
amount of foreign-sourced content in a U.S. manufactured product to
promote economic and national security, help stimulate economic growth,
and create jobs.
Nevertheless, an Initial Regulatory Flexibility Analysis (IRFA) has
been performed and summarized as follows:
This case amends the FAR to implement an Executive order
regarding maximizing the use of American-made goods, products, and
materials.
The objective of this proposed rule is to strengthen domestic
preferences under the Buy American statute, as required by E.O.
13881, by changing how a domestic product is defined and how the
price of a domestic product is determined to be unreasonable.
In accordance with Federal Procurement Data System data for
fiscal years (FY) 2017, 2018, and 2019 for new awards with foreign
place of performance for construction valued over the micro-purchase
threshold and awards for supplies to unique small businesses; this
rule will apply to only the 8 percent of foreign construction awards
which were made to small businesses and, only 14 percent of foreign
supply awards were made to small businesses.
----------------------------------------------------------------------------------------------------------------
FY 2017 FY 2018 FY 2019 Median
Buy American statute ------------------------------------------------------------------------
SB/Total SB/Total SB/Total SB %
----------------------------------------------------------------------------------------------------------------
Construction........................... 18/217 = 8% 13/223 = 6% 15/199 = 8% 8%
Supplies............................... 153/1,200 = 13 164/1,161 = 14 164/1,048 = 16 14
----------------------------------------------------------------------------------------------------------------
This rule is covered under the existing information collection
requirements associated with the Buy American statute. The rule will
strengthen domestic preferences under the Buy American statute and
provide small businesses the opportunity and incentive to deliver
U.S. manufactured products from domestic suppliers. It is expected
that this rule will benefit U.S. small business manufacturers,
including those of iron or steel.
This rule does not duplicate, overlap, or conflict with any
other Federal rules.
DoD, GSA, and NASA were unable to identify any significant
alternatives.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained for the Regulatory
Secretariat Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C 610 (FAR Case 2019-016), in
correspondence.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply;
however, these changes to the FAR do not impose additional information
collection requirements to the paperwork burden previously approved
under the Office of Management and Budget Control Number 9000-0024, Buy
American, Trade Agreements, and Duty-Free Entry- FAR Sections Affected:
52.225-2; 52.225-4, 52.225-6, 52.225-8 thru 52.225-12, and 52.225-21 &
52.225-23.
List of Subjects in 48 CFR Parts 12, 25, and 52
Government procurement.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 12, 25,
and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 12, 25, and 52 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 12--ACQUISITION OF COMMERCIAL ITEMS
0
2. Amend section 12.505 by revising paragraph (a) to read as follows:
12.505 Applicability of certain laws to contracts for the acquisition
of COTS items.
* * * * *
(a)(1) The portion of 41 U.S.C. 8302, American Materials Required
for Public Use, paragraph (a)(1) that reads ``substantially all from
articles, materials, or supplies mined, produced, or manufactured in
the United States,'' Buy American--Supplies, domestic content test,
except as provided in 25.101(a)(2)(ii) (see 52.225-1 and 52.225-3).
(2) The portion of 41 U.S.C. 8303, Contracts for Public Works,
paragraph (a)(2) that reads ``substantially all from articles,
materials, or supplies mined, produced, or manufactured in the United
States,'' Buy American--Construction Materials, domestic content test,
except as provided in 25.201(b)(2)(ii)(see 52.225-9 and 52.225-11).
* * * * *
[[Page 56563]]
PART 25--FOREIGN ACQUISITION
0
3. Amend section 25.001 by revising paragraph (c)(1) to read as
follows:
25.001 General.
* * * * *
(c) * * *
(1) The Buy American statute uses a two-part test to define a
``domestic end product'' or ``domestic construction material''
(manufactured in the United States and a domestic content test). The
domestic content test has been waived for acquisition of commercially
available off-the-shelf items, except a product that consists wholly or
predominantly of iron or steel or a combination of both (excluding
fasteners) (see 25.101(a) and 25.201(b)).
* * * * *
0
4. Amend section 25.003 by--
0
a. Revising the definitions ``Domestic construction material'' and
``Domestic end product''; and
0
b. Adding in alphabetical order the definitions ``Fastener'',
``Predominantly of iron or steel or a combination of both'', and
``Steel''.
The revisions and additions read as follows:
25.003 Definitions.
* * * * *
Domestic construction material means--
(1) For use in subparts other than 25.6--
(i) For construction material that does not consist wholly or
predominantly of iron or steel or a combination of both--
(A) An unmanufactured construction material mined or produced in
the United States; or
(B) A construction material manufactured in the United States, if--
(1) The cost of the components mined, produced, or manufactured in
the United States exceeds 55 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.
Components of unknown origin are treated as foreign; or
(2) The construction material is a COTS item; or
(ii) For construction material that consists wholly or
predominantly of iron or steel or a combination of both, a construction
material manufactured in the United States if the cost of iron and
steel not produced in the United States (excluding fasteners) as
estimated in good faith by the contractor, constitutes less than 5
percent of the cost of all the components used in such construction
material (produced in the United States means that all manufacturing
processes of the iron or steel must take place in the United States,
except metallurgical processes involving refinement of steel
additives); or
(2) For use in subpart 25.6, see the definition in 25.601.
Domestic end product means--
(1) For an end product that does not consist wholly or
predominantly of iron or steel or a combination of both--
(i) An unmanufactured end product mined or produced in the United
States;
(ii) An end product manufactured in the United States, if--
(A) The cost of its components mined, produced, or manufactured in
the United States exceeds 55 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. Components of unknown
origin are treated as foreign. Scrap generated, collected, and prepared
for processing in the United States is considered domestic; or
(B) The end product is a COTS item; or
(2) For an end product that consists wholly or predominantly of
iron or steel or a combination of both, an end product manufactured in
the United States, if the cost of iron and steel not produced in the
United States (excluding fasteners) as estimated in good faith by the
contractor, constitutes less than 5 percent of the cost of all the
components used in the end product (produced in the United States means
that all manufacturing processes of the iron or steel must take place
in the United States, except metallurgical processes involving
refinement of steel additives).
* * * * *
Fastener means a hardware device that mechanically joins or affixes
two or more objects together. Examples of fasteners are nuts, bolts,
pins, rivets, nails, clips, and screws.
* * * * *
Predominantly of iron or steel or a combination of both means that
the cost of the iron and steel content in an item exceeds 50 percent of
the total cost of all its components.
Steel means an alloy that includes at least 50 percent iron,
between .02 and 2 percent carbon, and may include other elements.
* * * * *
0
5. Amend section 25.100 by--
0
a. Removing from the end of paragraph (a)(2) ``and'';
0
b. Redesignating paragraph (a)(3) as paragraph (a)(4);
0
c. Adding a new paragraph (a)(3); and
0
d. Revising the newly redesignated paragraph (a)(4).
The addition and revision read as follows:
25.100 Scope of subpart.
(a) * * *
(3) Executive Order 13881, July 15, 2019; and
(4) Waiver of the domestic content test of the Buy American statute
for acquisition of commercially available off-the-shelf (COTS) items in
accordance with 41 U.S.C. 1907, but see 25.101(a)(2)(ii).
* * * * *
0
6. Amend section 25.101 by--
0
a. Removing from paragraph (a) introductory text ``statute uses'' and
adding ``statute and E.O. 13881 use'' in its place;
0
b. Revising paragraph (a)(2);
0
c. Removing from paragraph (b) ``component test'' and adding ``domestic
content test'' in its place; and
0
d. Removing from paragraph (c) ``Subpart 25.5'' and adding ``subpart
25.5'' in its place.
The revision reads as follows:
25.101 General.
(a) * * *
(2)(i) Except for an end product that consists wholly or
predominantly of iron or steel or a combination of both, the cost of
domestic components must exceed 55 percent of the cost of all the
components. In accordance with 41 U.S.C. 1907, this domestic content
test of the Buy American statute has been waived for acquisitions of
COTS items (see 12.505(a)) (but see paragraph (a)(2)(ii) of this
section).
(ii) For an end product that consists wholly or predominantly of
iron or steel or a combination of both, the cost of iron and steel not
produced in the United States (excluding fasteners) as estimated in
good faith by the contractor, must constitute less than 5 percent of
the cost of all the components used in the end product. This domestic
content test of the Buy American statute has not been waived for
acquisitions of COTS items in this category, except for fasteners.
* * * * *
25.105 [Amended]
0
7. Amend section 25.105 by--
0
a. Removing from paragraph (b)(1) ``6 percent'' and adding ``20
percent'' in its place; and
0
b. Removing from paragraph (b)(2) ``12 percent'' and ``Subpart 19.5''
and adding ``30 percent'' and ``subpart 19.5'' in their places,
respectively.
[[Page 56564]]
0
8. Amend section 25.200 by--
0
a. Removing from the end of paragraph (a)(2) ``and'';
0
b. Redesignating paragraph (a)(3) as paragraph (a)(4);
0
c. Adding a new paragraph (a)(3); and
0
d. Revising the newly redesignated paragraph (a)(4).
The addition and revision read as follows:
25.200 Scope of subpart.
(a) * * *
(3) Executive Order 13881, July 15, 2019; and
(4) Waiver of the domestic content test of the Buy American statute
for acquisitions of commercially available off-the-shelf (COTS) items
in accordance with 41 U.S.C. 1907, but see 25.201(b)(2)(ii).
* * * * *
0
9. Revise section 25.201 to read as follows:
25.201 Policy.
(a) Except as provided in 25.202, use only domestic construction
materials in construction contracts performed in the United States.
(b) The Buy American statute restricts the purchase of construction
materials that are not domestic construction materials. For
manufactured construction materials, the Buy American statute and E.O.
13881 use a two-part test to define domestic construction materials.
(1) The article must be manufactured in the United States; and
(2)(i) Except for construction material that consists wholly or
predominantly of iron or steel or a combination of both, the cost of
domestic components must exceed 55 percent of the cost of all the
components. In accordance with 41 U.S.C. 1907, this domestic content
test of the Buy American statute has been waived for acquisitions of
COTS items (see 12.505(a)).
(ii) For construction material that consists wholly or
predominantly of iron or steel or a combination of both, the cost of
iron and steel not produced in the United States (excluding fasteners)
as estimated in good faith by the contractor, must constitute less than
5 percent of the cost of all the components used in such construction
material. This domestic content test of the Buy American statute has
not been waived for acquisitions of COTS items in this category, except
for fasteners.
25.204 [Amended]
0
10. Amend section 25.204 in paragraph (b) by removing ``6 percent'' and
adding ``20 percent'' in its place.
0
11. Amend section 25.504-1 by--
0
a. Revising the table in paragraph (a)(1);
0
b. Removing from paragraph (a)(2) ``12 percent'' and ``$11,200'' and
adding ``30 percent'' and ``$13,000'' in their places, respectively;
and
0
c. Removing from paragraph (b)(2) ``12 percent'' and ``$11,424'' and
adding ``30 percent'' and ``$13,260'' in their places, respectively.
The revision reads as follows:
25.504-1 Buy American statute.
(a)(1) * * *
------------------------------------------------------------------------
------------------------------------------------------------------------
Offer A.................... $16,000 Domestic end product, small
business.
Offer B.................... 15,700 Domestic end product, small
business.
Offer C.................... 10,000 U.S.-made end product (not
domestic), small business.
------------------------------------------------------------------------
* * * * *
0
12. Amend section 25.504-2 by revising the table to read as follows:
25.504-2 WTO GPA/Caribbean Basin Trade Initiative/FTAs.
* * * * *
------------------------------------------------------------------------
------------------------------------------------------------------------
Offer A.................... $304,000 U.S.-made end product (not
domestic).
Offer B.................... 303,000 U.S.-made end product
(domestic), small business.
Offer C.................... 300,000 Eligible product.
Offer D.................... 295,000 Noneligible product (not U.S.-
made).
------------------------------------------------------------------------
* * * * *
0
13. Amend section 25.504-3 by--
0
a. Revising the entry ``Offer B'' in the table in paragraph (a);
0
b. Revising the entry ``Offer B'' in the table in paragraph (b); and
0
c. Revising entries ``Offer B'' and ``Offer C'' in the table in
paragraph (c).
The revisions read as follows:
25.504-3 FTA/Israeli Trade Act.
(a) * * *
------------------------------------------------------------------------
------------------------------------------------------------------------
* * * * *
Offer B.................... $100,000 Eligible product.
------------------------------------------------------------------------
* * * * *
(b) * * *
------------------------------------------------------------------------
------------------------------------------------------------------------
* * * * *
Offer B.................... $103,000 Noneligible product.
------------------------------------------------------------------------
* * * * *
(c) * * *
------------------------------------------------------------------------
------------------------------------------------------------------------
* * * * *
Offer B.................... $103,000 Eligible product.
Offer C.................... 100,000 Noneligible product.
------------------------------------------------------------------------
* * * * *
0
14. Amend section 25.504-4 by--
0
a. In paragraph (a)--
0
i. Revising the table;
0
ii. In STEP 1, Items 3 and 5, removing ``6 percent'' and adding ``20
percent'' in their places, respectively; and
0
iii. Revising STEP 2 and 3.
0
b. Revising paragraph (b).
The revisions read as follows:
25.504-4 Group award basis.
(a) * * *
----------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------
Total.................................................... 121,500 116,000 109,000
----------------------------------------------------------------------------------------------------------------
* * * * *
STEP 2: Evaluate Offer C against the tentative award pattern for
Offers A and B:
[[Page 56565]]
----------------------------------------------------------------------------------------------------------------
Offers
------------------------------------------------------------------
Item Tentative award
Low offer pattern from A C
and B
----------------------------------------------------------------------------------------------------------------
1............................................ A.............................. DO = $55,000 * NEL =
$60,000.
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 = 12,000 DO = 14,000
---------------------------------
Total.................................... ............................... 113,000 119,000
----------------------------------------------------------------------------------------------------------------
* Offer + 20 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 covered by the WTO GPA. The evaluated price
of Offer C, Item 1, becomes $60,000 ($50,000 plus 20 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 $12,000 ($10,000
plus 20 percent). Evaluate the remaining items without applying a
factor.
STEP 3: The tentative unrestricted award pattern from Offers A and
B is lower than the evaluated price of Offer C. Award the combination
of Offers A and B. Note that if Offer C had not specified all-or-none
award, award would be made on Offer C for line items 3 and 4, totaling
an award of $32,000.
(b) Example 2.
----------------------------------------------------------------------------------------------------------------
Offers
Item --------------------------------------------------
A B C
----------------------------------------------------------------------------------------------------------------
1............................................................ DO = $50,000 EL = $50,500 NEL = $50,000.
2............................................................ NEL = 10,300 NEL = 10,000 EL = 10,200
3............................................................ EL = 20,400 EL = 21,000 NEL = 20,200
4............................................................ DO = 10,500 DO = 10,300 DO = 10,400
--------------------------------------------------
Total.................................................... 91,200 91,800 90,800
----------------------------------------------------------------------------------------------------------------
Problem: The solicitation specifies award on a group basis. Assume
the Buy American statute applies and the acquisition cannot be set
aside for small business concerns. All offerors are large businesses.
Analysis: (See 25.503(c))
STEP 1: Determine which of the offers are domestic (see
25.503(c)(1)):
------------------------------------------------------------------------
Domestic (percent) Determination
------------------------------------------------------------------------
A..................... $50,000 (Offer A1) + Domestic.
$10,500 (Offer A4) =
$60,500.
$60,500/$91,200 (Offer A
Total) = 66.3%..
B..................... $10,300 (Offer B4)/$91,800 Foreign.
(Offer B Total) = 11.2%.
C..................... $10,400 (Offer C4)/$90,800 Foreign.
(Offer C Total) = 11.5%.
------------------------------------------------------------------------
STEP 2: Determine whether foreign offers are eligible or
noneligible offers (see 25.503(c)(2)):
------------------------------------------------------------------------
Domestic + eligible
(percent) Determination
------------------------------------------------------------------------
A..................... N/A (Both Domestic)....... Domestic.
B..................... $50,500 (Offer B1) + Eligible.
$21,000 (Offer B3) +
$10,300 (Offer B4) =
$81,800.
$81,800/$91,800 (Offer B
Total) = 89.1%..
C..................... $10,200 (Offer C2) + Noneligible.
$10,400 (Offer C4) =
$20,600.
$20,600/$90,800 (Offer C
Total) = 22.7%..
------------------------------------------------------------------------
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 20 percent factor (use 30
percent if Offer A is a small business) to Offer C yields an evaluated
price of $108,960 ($90,800 + 20 percent). Award on Offer A (see
25.502(c)(4)(ii)). Note that, if Offer A were greater than Offer B, an
evaluation factor would not be applied, and award would be on Offer C
(see 25.502(c)(3)).
25.601 [Amended]
0
15. Amend section 25.601 by removing the definition ``Steel''.
[[Page 56566]]
25.604 [Amended]
0
16. Amend section 25.604 in paragraph (c)(2) by removing ``6 percent''
and adding ``20 percent'' in its place.
25.605 [Amended]
0
17. Amend section 25.605 by--
0
a. Removing from paragraph (a)(2) ``6 percent'' and adding ``20
percent'' in its place; and
0
b. Removing from paragraph (a)(3) ``.06'' and adding ``.20'' in its
place.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
18. Amend section 52.212-3 by--
0
a. Revising the date of the provision; and
0
b. Revising paragraphs (f)(1), (g)(1)(i), the first sentence of
(g)(1)(ii), and (g)(1)(iii) introductory text.
The revisions read as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
Offeror Representations and Certifications--Commercial Items (DATE)
* * * * *
(f) * * *
(1)(i) The Offeror certifies that each end product, except those
listed in paragraph (f)(2) of this provision, is a domestic end
product.
(ii) The Offeror shall list as foreign end products those end
products manufactured in the United States that do not qualify as
domestic end products.
(iii) The terms ``domestic end product,'' ``end product,''
``foreign end product,'' and ``United States'' are defined in the
clause of this solicitation entitled ``Buy American-Supplies.''
* * * * *
(g)(1) * * *
(i)(A) The Offeror certifies that each end product, except those
listed in paragraph (g)(1)(ii) or (iii) of this provision, is a
domestic end product.
(B) The terms ``Bahrainian, Moroccan, Omani, Panamanian, or
Peruvian end product,'' ``domestic end product,'' ``end product,''
``foreign end product,'' ``Free Trade Agreement country,'' ``Free Trade
Agreement country end product,'' ``Israeli end product,'' and ``United
States'' are defined in the clause of this solicitation entitled ``Buy
American--Free Trade Agreements--Israeli Trade Act.''
(ii) The Offeror certifies that the following supplies are Free
Trade Agreement country end products (other than Bahrainian, Moroccan,
Omani, Panamanian, or Peruvian end products) or Israeli end products as
defined in the clause of this solicitation entitled ``Buy American--
Free Trade Agreements--Israeli Trade Act.''
* * * * *
(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--Free Trade Agreements--Israeli Trade Act.'' 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.
* * * * *
0
19. Amend section 52.212-5 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraphs (b)(48) and (b)(49)(i) through (iv) ``(MAY
2014)'' and adding ``(DATE)'' in their places, respectively.
The revision reads 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)
* * * * *
0
20. Amend section 52.213-4 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (b)(1)(xvii) introductory text ``(MAY
2014)'' and adding ``(DATE)'' in its place.
The revision reads as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Items) (DATE)
* * * * *
0
21. Amend section 52.225-1 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic end product''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and
``Steel''; and
0
c. Revising paragraph (b).
The revisions and additions read as follows:
52.225-1 Buy American--Supplies.
* * * * *
Buy American--Supplies (DATE)
(a) * * *
Domestic end product means--
(1) For an end product that does not consist wholly or
predominantly of iron or steel or a combination of both--
(i) An unmanufactured end product mined or produced in the
United States;
(ii) An end product manufactured in the United States, if--
(A) The cost of its components mined, produced, or manufactured
in the United States exceeds 55 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.
Components of unknown origin are treated as foreign. Scrap
generated, collected, and prepared for processing in the United
States is considered domestic; or
(B) The end product is a COTS item; or
(2) For an end product that consists wholly or predominantly of
iron or steel or a combination of both, an end product manufactured
in the United States, if the cost of iron and steel not produced in
the United States (excluding fasteners) as estimated in good faith
by the contractor, constitutes less than 5 percent of the cost of
all the components used in the end product (produced in the United
States means that all manufacturing processes of the iron or steel
must take place in the United States, except metallurgical processes
involving refinement of steel additives).
* * * * *
Fastener means a hardware device that mechanically joins or
affixes two or more objects together. Examples of fasteners are
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
Steel means an alloy that includes at least 50 percent iron,
between .02 and 2 percent carbon, and may include other elements.
* * * * *
(b) 41 U.S.C. chapter 83, Buy American, provides a preference
for domestic end products for supplies acquired for use in the
United States. In accordance with 41 U.S.C. 1907, the domestic
content test of the Buy American statute is waived for an end
product that is a COTS item (see 12.505(a)(1)), except that for an
end product that consists wholly or predominantly of iron or steel
or a combination of both, the domestic content test is applied only
to the iron and steel content of the end product, excluding
fasteners.
* * * * *
0
22. Amend section 52.225-2 by revising the date of the provision and
paragraph (a) to read as follows:
52.225-2 Buy American Certificate.
* * * * *
Buy American Certificate (DATE)
(a)(1) The Offeror certifies that each end product, except those
listed in paragraph (b) of this provision, is a domestic end
product.
(2) The Offeror shall list as foreign end products those end
products manufactured in the United States that do not qualify as
domestic end products.
[[Page 56567]]
(3) The terms ``domestic end product,'' ``end product,'' and
``foreign end product'' are defined in the clause of this
solicitation entitled ``Buy American--Supplies.''
* * * * *
0
23. Amend section 52.225-3 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic end product''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and
``Steel'';
0
c. Revising the second sentence of paragraph (c);
0
d. Revising the date in the introductory text and the second sentence
of paragraph (c) of Alternate I;
0
e. Revising the date in the introductory text and the second sentence
of paragraph (c) of Alternate II; and
0
f. Revising the date in the introductory text and the second sentence
of paragraph (c) of Alternate III.
The revisions and additions read as follows:
52.225-3 Buy American--Free Trade Agreements--Israeli Trade Act.
* * * * *
Buy American--Free Trade Agreements--Israeli Trade Act (DATE)
(a) * * *
Domestic end product means--
(1) For an end product that does not consist wholly or
predominantly of iron or steel or a combination of both--
(i) An unmanufactured end product mined or produced in the
United States;
(ii) An end product manufactured in the United States, if--
(A) The cost of its components mined, produced, or manufactured
in the United States exceeds 55 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.
Components of unknown origin are treated as foreign. Scrap
generated, collected, and prepared for processing in the United
States is considered domestic; or
(B) The end product is a COTS item; or
(2) For an end product that consists wholly or predominantly of
iron or steel or a combination of both, an end product manufactured
in the United States, if the cost of iron and steel not produced in
the United States (excluding fasteners) as estimated in good faith
by the contractor, constitutes less than 5 percent of the cost of
all the components used in the end product (produced in the United
States means that all manufacturing processes of the iron or steel
must take place in the United States, except metallurgical processes
involving refinement of steel additives).
* * * * *
Fastener means a hardware device that mechanically joins or
affixes two or more objects together. Examples of fasteners are
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
Steel means an alloy that includes at least 50 percent iron,
between .02 and 2 percent carbon, and may include other elements.
* * * * *
(c) * * * In accordance with 41 U.S.C. 1907, the domestic
content test of the Buy American statute is waived for an end
product that is a COTS item (see 12.505(a)(1)), except that for an
end product that consists wholly or predominantly of iron or steel
or a combination of both, the domestic content test is applied only
to the iron and steel content of the end product, excluding
fasteners. * * *
Alternate I (DATE) * * *
(c) * * * In accordance with 41 U.S.C. 1907, the domestic
content test of the Buy American statute is waived for an end
product that is a COTS item (see 12.505(a)(1)), except that for an
end product that consists wholly or predominantly of iron or steel
or a combination of both, the domestic content test is applied only
to the iron and steel content of the end product, excluding
fasteners. * * *
Alternate II (DATE) * * *
(c) * * * In accordance with 41 U.S.C. 1907, the domestic
content test of the Buy American statute is waived for an end
product that is a COTS item (see 12.505(a)(1)), except that for an
end product that consists wholly or predominantly of iron or steel
or a combination of both, the domestic content test is applied only
to the iron and steel content of the end product, excluding
fasteners. * * *
Alternate III (DATE) * * *
(c) * * * In accordance with 41 U.S.C. 1907, the domestic
content test of the Buy American statute is waived for an end
product that is a COTS item (see 12.505(a)(1)), except that for an
end product that consists wholly or predominantly of iron or steel
or a combination of both, the domestic content test is applied only
to the iron and steel content of the end product, excluding
fasteners. * * *
0
24. Amend section 52.225-4 by--
0
a. Revising the date of the provision;
0
b. Revising paragraph (a);
0
c. In paragraph (b) introductory text removing ``offeror'' and adding
``Offeror'' in its place;
0
d. Revising the first and second sentences of paragraph (c);
0
e. In Alternate I by--
0
i. Revising the date of the Alternate; and
0
ii. Removing from paragraph (b) introductory text ``offeror'' and
adding ``Offeror'' in its place;
0
f. In Alternate II by--
0
i. Revising the date of the Alternate; and
0
ii. Removing from paragraph (b) introductory text ``offeror'' and
adding ``Offeror'' in its place; and
0
g. In Alternate III by--
0
i. Revising the date of the Alternate; and
0
ii. Removing from paragraph (b) introductory text ``offeror'' and
adding ``Offeror'' in its place.
The revisions read as follows:
52.225-4 Buy American-Free Trade Agreements-Israeli Trade Act
Certificate.
* * * * *
Buy American-Free Trade Agreements-Israeli Trade Act Certificate (DATE)
(a)(1) The Offeror certifies that each end product, except those
listed in paragraph (b) or (c) of this provision, is a domestic end
product.
(2) The terms ``Bahrainian, Moroccan, Omani, Panamanian, or
Peruvian end product,'' ``domestic end product,'' ``end product,''
``foreign end product,'' ``Free Trade Agreement country,'' ``Free
Trade Agreement country end product,'' ``Israeli end product,'' and
``United States'' are defined in the clause of this solicitation
entitled ``Buy American-Free Trade Agreements-Israeli Trade Act.''
* * * * *
(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--Free Trade Agreements--Israeli Trade Act.'' 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.
* * * * *
Alternate I (DATE) * * *
Alternate II (DATE) * * *
Alternate III (DATE) * * *
0
25. Amend section 52.225-9 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic construction material''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and
``Steel'';
0
c. Revising paragraph (b)(1); and
0
d. Removing from paragraph (b)(3)(i) ``6 percent'' and adding ``20
percent'' in its place.
The revisions and additions read as follows:
52.225-9 Buy American--Construction Materials.
* * * * *
Buy American--Construction Materials (DATE)
(a) * * *
Domestic construction material means--
(1) For construction material that does not consist wholly or
predominantly of iron or steel or a combination of both--
(i) An unmanufactured construction material mined or produced in
the United States; or
(ii) A construction material manufactured in the United States,
if--
[[Page 56568]]
(A) The cost of its components mined, produced, or manufactured
in the United States exceeds 55 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. Components of unknown origin are treated as foreign; or
(B) The construction material is a COTS item.
(2) For construction material that consists wholly or
predominantly of iron or steel or a combination of both, a
construction material manufactured in the United States if the cost
of iron and steel not produced in the United States (excluding
fasteners) as estimated in good faith by the contractor, constitutes
less than 5 percent of the cost of all components used in such
construction material (produced in the United States means that all
manufacturing processes of the iron or steel must take place in the
United States, except metallurgical processes involving refinement
of steel additives).
Fastener means a hardware device that mechanically joins or
affixes two or more objects together. Examples of fasteners are
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
Steel means an alloy that includes at least 50 percent iron,
between .02 and 2 percent carbon, and may include other elements.
* * * * *
(b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy
American, by providing a preference for domestic construction
material. In accordance with 41 U.S.C. 1907, the domestic content
test of the Buy American statute is waived for construction material
that is a COTS item, except that for construction material that
consists wholly or predominantly of iron or steel or a combination
of both, the domestic content test is applied only to the iron and
steel content of the construction materials, excluding fasteners.
(See FAR 12.505(a)(2)). The Contractor shall use only domestic
construction material in performing this contract, except as
provided in paragraphs (b)(2) and (b)(3) of this clause.
* * * * *
0
26. Amend section 52.225-11 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Revising the definition ``Domestic construction material''; and
0
ii. Adding in alphabetical order the definitions ``Fastener'' and
``Steel'';
0
c. Revising paragraph (b)(1);
0
d. Removing from paragraph (b)(4)(i) ``6 percent'' and adding ``20
percent'' in its place; and
0
e. In Alternate I--
0
i. Revising the date of the Alternate; and
0
ii. Revising paragraph (b)(1).
The revisions and additions read as follows:
52.225-11 Buy American--Construction Materials Under Trade
Agreements.
* * * * *
Buy American--Construction Materials Under Trade Agreements (DATE)
(a) * * *
Domestic construction material means--
(1) For construction material that does not consist wholly or
predominantly of iron or steel or a combination of both--
(i) An unmanufactured construction material mined or produced in
the United States; or
(ii) A construction material manufactured in the United States,
if--
(A) The cost of its components mined, produced, or manufactured
in the United States exceeds 55 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. Components of unknown origin are treated as foreign; or
(B) The construction material is a COTS item;
(2) For construction material that consists wholly or
predominantly of iron or steel or a combination of both, a
construction material manufactured in the United States if the cost
of iron and steel not produced in the United States (excluding
fasteners) as estimated in good faith by the contractor, constitutes
less than 5 percent of the cost of all components used in such
construction material (produced in the United States means that all
manufacturing processes of the iron or steel must take place in the
United States, except metallurgical processes involving refinement
of steel additives).
Fastener means a hardware device that mechanically joins or
affixes two or more objects together. Examples of fasteners are
nuts, bolts, pins, rivets, nails, clips, and screws.
* * * * *
Steel means an alloy that includes at least 50 percent iron,
between .02 and 2 percent carbon, and may include other elements.
* * * * *
(b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy
American, by providing a preference for domestic construction
material. In accordance with 41 U.S.C. 1907, the domestic content
test of the Buy American statute is waived for construction material
that is a COTS item, except that for construction material that
consists wholly or predominantly of iron or steel or a combination
of both, the domestic content test is applied only to the iron and
steel content of the construction material, excluding fasteners.
(See FAR 12.505(a)(2)). In addition, the Contracting Officer has
determined that the WTO GPA and Free Trade Agreements (FTAs) apply
to this acquisition. Therefore, the Buy American restrictions are
waived for designated country construction materials.
* * * * *
Alternate I (DATE) * * *
(b) * * * (1) This clause implements 41 U.S.C. chapter 83, Buy
American, by providing a preference for domestic construction
material. In accordance with 41 U.S.C. 1907, the domestic content
test of the Buy American statute is waived for construction material
that is a COTS item, except that for construction material that
consists wholly or predominantly of iron or steel or a combination
of both, the domestic content test is applied only to the iron and
steel content of the construction material, excluding fasteners.
(See FAR 12.505(a)(2)). In addition, the Contracting Officer has
determined that the WTO GPA and all the Free Trade Agreements except
the Bahrain FTA, NAFTA, and the Oman FTA apply to this acquisition.
Therefore, the Buy American statute restrictions are waived for
designated country construction materials other than Bahrainian,
Mexican, or Omani construction materials.
* * * * *
0
27. Amend section 52.225-21 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (b)(4)(i)(B) ``6 percent'' and adding ``20
percent'' in its place;
0
c. Removing from paragraph (c) heading ``Section'' and adding
``section'' in its place; and
0
d. In paragraph (d):
0
i. Removing from the first undesignated paragraph following the table
``reponse'' and adding ``response'' in its place; and
0
ii. Removing from the second undesignated paragraph following the table
``*Include'' and adding ``[*Include'' in its place.
The revision reads as follows:
52.225-21 Required Use of American Iron, Steel, and Manufactured
Goods--Buy American Statute--Construction Materials.
* * * * *
Required Use of American Iron, Steel, and Manufactured Goods--Buy
American Statute--Construction Materials (DATE)
* * * * *
0
28. Amend section 52.225-22 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (b) ``offeror'' and adding ``Offeror'' in
its place wherever it appears;
0
c. Removing from paragraph (c)(1)(ii) ``6 percent'' and adding ``20
percent'' in its place;
0
d. Removing from paragraph (c)(3) ``offeror'' and adding ``Offeror'' in
its place; and
0
e. Removing from paragraphs (d)(1), (2), and (3) introductory text
``offeror'' and adding ``Offeror'' in their places, respectively.
The revision reads as follows:
52.225-22 Notice of Required Use of American Iron, Steel, and
Manufactured Goods--Buy American Statute--Construction Materials.
* * * * *
[[Page 56569]]
Notice of Required Use of American Iron, Steel, and Manufactured
Goods--Buy American Statute--Construction Materials (DATE)
* * * * *
0
29. Amend section 52.225-23 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (b)(4)(i)(B) ``6 percent'' and adding ``20
percent'' in its place.
The revision reads as follows:
52.225-23 Required Use of American Iron, Steel, and Manufactured
Goods--Buy American Statute--Construction Materials Under Trade
Agreements.
* * * * *
Required Use of American Iron, Steel, and Manufactured Goods--Buy
American Statute--Construction Materials Under Trade Agreements (DATE)
* * * * *
0
30. Amend section 52.225-24 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (b) ``offeror'' and adding ``Offeror'' in
its place wherever it appears;
0
c. Removing from paragraph (c)(1)(ii) ``6 percent'' and adding ``20
percent'' in its place;
0
d. Removing from paragraph (c)(3) ``offeror'' and adding ``Offeror'' in
its place; and
0
e. Removing from paragraphs (d)(1), (2), and (3) introductory text
``offeror'' and adding ``Offeror'' in their places, respectively.
The revision reads as follows:
52.225-24 Notice of Required Use of American Iron, Steel, and
Manufactured Goods--Buy American Statute--Construction Materials Under
Trade Agreements.
* * * * *
Notice of Required Use of American Iron, Steel, and Manufactured
Goods--Buy American Statute--Construction Materials Under Trade
Agreements (DATE)
* * * * *
[FR Doc. 2020-20116 Filed 9-11-20; 8:45 am]
BILLING CODE 6820-EP-P