WORLD TRADE  
ORGANIZATION  GPA/W/307 
1 October 2009 
 
 (09-4704) 
Committee on Government Procurement Original:   English 
  
 
RESPONSES OF THE UNITED STATES TO ADDITIONAL QUESTIONS OF THE 
EUROPEAN COMMUNITIES REGARDING THE "BUY AMERICAN" PROVISIONS  
IN THE US ECONOMIC STIMULUS PACKAGE 
 
Communication from the United States
 
 
  The following communication, dated 30 September 2009, is being circulated at the request of the Delegation of the United States.  It responds to the additional questions posed to the United States 
by the European Communities (GPA/W/305), follo wing the Committee's informal discussion held on 
13 May 2009. 
 
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I. INTERIM RULE – FEDERAL ACQUISITION REGULATION, AMERICAN 
RECOVERY AND REINVESTMENT ACT  OF 2009:  BUY AMERICAN 
REQUIREMENTS FOR CONSTRUCTION MATERIAL (FAC 2005-32, FAR CASE 
2009-008) 
1. Terminology and clarity of provisions 
• The interim FAR rule does not seem to provide a clear definition of what constitutes 
"manufactured materials".  Also, the interim FAR rule does not provide any 
guidance on how to determine whether suffi cient activity has taken place in the 
United States for a material to be cons idered "produced in the US".  How does the 
US intend to clarify these matters in the final rule? 
 
US Response
: The United States is unable to comment on any changes that may be made to the 
interim FAR rule.  However, one of the goals of the implementation of the ARRA was to make the 
definitions and procedures as close to the existi ng Federal Acquisition Regulation (FAR) definitions 
and procedures as possible, except where differences  are required by the ARRA.  The Buy American 
Act includes the requirement for domestic goods to be "manufactured" in the United States.  As a 
consequence, the terms "manufactured" and "produced " have been used in FAR Part 25 prior to the 
issuance of the interim FAR rule and apply to the use of those terms in the interim FAR rule.  It is a 
reasonable interpretation of the law to equate "p roduction" of manufactured goods to "manufacture". 
 
• Further clarification on what are considered  "materials to be incorporated in the 
construction" as well as to what is a "p roject of governmental entity" would be 
needed in order to ensure consistent int erpretation by the different agencies.  Does 
the US intend to clarify these matters in the final rule, and, if so, how? 
 
US Response : The United States is unable to comment on any changes that may be made to the 
interim FAR rule.  However, with respect to "pro ject of government entity", the interim FAR rule 
(FAR 25.602(a)) provides a cross-reference to the de finition of "public building or public work" at GPA/W/307 
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  FAR 22.401 (" building or work, the construction, prosecu tion, completion, or repair of which…is 
carried on directly by authority of, or with funds of, a Federal agency to serve the interest of the 
general public regardless of whether title thereof is in a Federal agency ").  "Materials that are to be 
incorporated in the construction" is comparable  to the long-standing definition of "construction 
material" in FAR 25.003 as an " article, material, or supply brought to the construction site by the 
contractor or a subcontractor for incorporation into the building or work ".  It distinguishes between 
the nail that attaches a piece of wood to a beam of a building versus the hammer that is used to attach 
the nail but does not become part of the building.  
• Under Section 52, the interim FAR rule has amended some provisions regarding 
existing contracts.  Could the US clarif y how the new "Buy American" requirements 
will apply to future orders or to the not yet delivered orders of existing contracts? 
 
US Response
: The ARRA clauses apply solely to work that is paid for with ARRA funds.  
Therefore, if a contract is modified to add work  funded by the ARRA, the new clauses apply to that 
portion of the work, not to work previously contracted for and funded with non-ARRA funds. 
 
• Could the US clarify the scope of the "inconsistent with public interest" exemption?  
Could the US give some examples of past cases falling within the scope of this exemption? 
 
US Response
: The determination of whether application of the ARRA "buy American" requirement 
would be "inconsistent with public interest" is made on a case-by-case basis by the relevant federal 
agency.  Waivers based on "inconsistent with public  interest" that have been issued under the ARRA, 
include the following (with the relevant citation in the Federal Register, which may be found at 
http://www.gpoaccess.gov/fr/ ): 
  - Department of Agriculture, Rural Utilities Service, Waiver "with respect to certain 
broadband equipment that will be used in projects under the Broadband Initiatives 
Program" (74 FR 31402, 1 July 2009). 
  - Department of Commerce, Nationa l Telecommunications and Information 
Administration, Waiver "with respect to certain broadband equipment that will be 
used in projects under the Broadband Technology Opportunities Program" 
(74 FR 31410, 1 July 2009). 
  - Environmental Protection Agency, Revised Nationwide waiver for projects that 
solicited bids on or after 1 October 2008 a nd prior to 17 February 2009 that are 
financed through the Clean or Drinking Water State Revolving Funds using 
Assistance provided under ARRA (74 FR 26397, 2 June 2009). 
  - Environmental Protection Agency, Nationwide waiver for de minimis incidental 
components of projects financed through the Clean or Drinking Water State Revolving Funds using assistance pr ovided under ARRA (74 FR 39959, 
10 August 2009). 
 
• Are there any rules (guidelines) to be fo llowed by the head of the contracting 
activity, if he is to declare an item "non-available"? How is the criterion of 
"sufficient and reasonably available commercial quantities and quality" 
interpreted? 
  GPA/W/307 
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  US Response : The Interim FAR Rule (Section 25.603( a)(3)) and the Interim OMB Guidance 
(Section 176.80) set out guidance relating to non-ava ilability determinations.  The FAR rule states:  
"The determinations of non-availability of the ar ticles listed at 48 CFR 25.104(a) and the procedures 
at 48 CR 25.103(b)(1) also apply if any of those articles are manufactured goods needed in the 
project ". 
 
• There is no reference to the wording "case or category of cases" included in 
Section 1605(b) of the ARRA.  The FAR in terim rule seems to imply that the 
exceptions will only be applicable on a case by case basis.  Could the US further clarify this point? 
 US Response
: Section 1605 of the ARRA authorizes depa rtments and agencies to issue waivers in 
three cases (non-availabilty, unreasonableness of cost, and inconsistent with the public interest), and 
provides that those exceptions may be applied in "a ny case or category of cases".  As a consequence, a 
department or agency may make an exception on an individual-contract basis or for a class of contracts. 
 
• What type of proof will be required from bi dders that a construction material meets 
the relevant criteria (e.g. has been "manufactured in the US" or that a material is in fact a component of a manufactured good)?  Could the US confirm that the burden of proof requested to foreign companies will not be different from what is requested from domestic suppliers? 
 
US Response
: Generally, contracting officers rely upon the certification provided by a prospective 
supplier, required by the clauses at FAR 52.225-21 or 22, in the supplier's proposal.  A contracting 
officer can ask any offeror for additional details or proof in any case where the contracting officer has 
reason to believe that that a supplier's certifications may not be accurate.  There is no basis for contracting officers to treat foreign companies diffe rently than companies b ased in the United States. 
 
• The EC understands that guidance for the implementation of the ARRA Section 
1605 has been issued by other US fe deral agencies (i.e. EPA, Federal 
Transit/Highways Administrations) in so me cases prior to the publication of the 
FAR interim rule.  Could the US clarify how these different sets of guidance and implementation rules will coexist and their application be monitored? 
 
US Response
: Agencies that receive ARRA funds are authorized to issue agency-specific 
regulations or guidance that implement or supplement the FAR or the OMB guidance with respect to programmes under their authority, as long as the agency regulations or guidance do not contradict the FAR or the OMB guidance.  The Office of Manage ment and Budget (OMB) generally reviews agency 
regulations and guidance documents.  The OMB O ffice of Federal Procurement Policy reviews and 
approves agency-specific acquisition regulations or  guidance to ensure that agencies are in 
compliance with the FAR.  The OMB Office of Fe deral Financial Management has discussions with 
agencies that are contemplating issuing supplementa l guidance to help ensure consistency with the 
OMB guidance.  With regard to the reference to Federal Transit/Highway Administration, it should be 
noted that where a Federal surface transportation pr oject for highways or mass transit is undertaken 
using grants under ARRA, Title XII of the ARRA pr ovides that the "buy American" provisions of the 
Safe, Accountable, Flexible, Efficient Transportation Equity Act will apply, rather than the "buy 
American" provisions of the ARRA. 
 GPA/W/307 
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  2. Relevance of the FAR with the US GPA commitments (compliance issues) 
• What procurement rules will be applic able in cases where ARRA funded/co-funded 
projects will be tendered by a state, which disposes of its own procurement legislation? 
 US Response
: Where a state receives ARRA funds, it is obligated to comply with the federal 
requirements attached to the funds, including the application of the ARRA "buy American" 
requirement.  The state is required to conduct the procurement in accordance with those requirements, 
but may also apply its own regulations, provided th at they are not inconsistent with the federal 
requirements or inconsistent with US international obligations.  As an example, if a state that is 
covered by an international agreement excludes construction services from its commitments, it would 
apply the "buy American" requirement to all ARRA -funded projects, unless an applicable waiver is 
issued.  
• The EC understands that a large proportion  of the procurement that will use ARRA 
funds will also be conducted in combination with other funds.  The FAR interim rule does not provide any information on this particular situation.  Could the US clarify 
if the ARRA "Buy American" provisions would apply also to contracts only 
partially funded from ARRA funds? 
 
US Response
: The ARRA "buy American" provisions apply to projects that are partially funded by 
ARRA.  For example, if a contract is funded with both ARRA funds and non-ARRA funds, the 
ARRA provisions will apply to the portion of th e contract that is funded with ARRA funds. 
 
• The FAR interim rule does not include any provision on the applicable regime for 
joint procurement, in particular the ca se where an entity, covered by the US 
commitments under the GPA procures jointly with  an entity which is not part of the 
US commitments under the GPA.  What is  the applicable regime and will this 
regime be clearly explained in the final rule? 
 
US Response : The United States is unable to comment on any changes that may be made to the 
interim FAR rule.  However, where a procuremen t is undertaken jointly by an entity with an 
international obligation and an entity that does not have such an obligation, the procurement will be 
conducted in a manner that ensures that the intern ational obligation is honored.  That means that 
products from ARRA designate d countries will not be subject to th e restrictions of Section 1605 of 
ARRA.  
• The FAR interim rules does not address the issue of the relationship between the 
scope of the exception listed under Annex 2 of the US Appendix I in the GPA (procurement of construction grade steel by some states) and the scope of the ARRA 
"Buy American" provision, which targets the use of steel in public buildings and 
public works.  Could the US clarify this issue? 
 
US Response
: Where a state that is listed in Annex 2 of the GPA or other international agreement 
has an exception for construction grade steel, that st ate will apply the "buy American" requirement in 
Section 1605 to the purchase of such steel in any ARRA-funded project. 
  GPA/W/307 
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  II. INTERIM OMB GUIDANCE – OFFICE OF MANAGEMENT AND BUDGET:  
REQUIREMENTS FOR IMPLEMENTING  SECTION 1605 OF THE AMERICAN 
RECOVERY AND REINVESTMENT ACT OF 2009 FOR FINANCIAL ASSISTANCE 
AWARD (2 CFR PART 176) 
1. Terminology and clarity of the interim OMB guidance 
• Could the US confirm that the OMB fina l guidance will, as per the FAR interim 
rule, include the same "substantial transformation" test used under the GPA and the Trade Agreements Act (TAA)? 
 
US Response
: The United States is unable to comment on any changes that may be made to the 
interim OMB guidance.  
• Most US States implement state-level "domestic" preferences and "Buy 
America(n)" specific laws.  The interim OMB guidance does not include any information on the relationship between these provisions and the new federal "Buy America(n)" rules applicable when usin g ARRA funding.  Does the US intend to 
clarify this issue in the final guidance? 
 US Response
: The United States is unable to comment on any changes that may be made tothe 
interim OMB guidance. 
 
• The interim OMB guidance provides for the po ssibility to issue waivers applicable to 
a category of cases.  Could the US provide more explanation on this possibility?  In 
particular, on which basis will a waiver be applicable to one or a category of cases? 
 
US Response : The head of each federal department or ag ency is authorized under Section 1605 of 
ARRA to issue waivers that apply to a particular case (for example, a specific project) or a category of 
cases (for example, all projects funded under an ARRA grant programme).  The agency would need to 
justify a waiver that applies to an individual case or  a category/class and publish its justification in the 
Federal Register.  Note the waivers listed above in response to Question 1(4) relating to the FAR 
Rule. 
 
• The interim OMB guidance does not define th e scope of the "inconsistency with the 
public interest" exemption.  Could the US explain the reasons for this?  Does the US 
intend to include any explanation of this notion in the OMB final guidance? 
 
US Response : The "inconsistency with the public inter est" exception is a standard exception for 
"buy American" requirements, beginning with the Buy American Act of 1933.  The United States has 
not found a need to define the scope of this excepti on, but rather applies it on a case-by-case basis, as 
noted above.  The United States is unable to comment on any changes that may be made to the interim 
OMB Guidance. 
 GPA/W/307 
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  2. Relevance of the interim OMB guidance with the US GPA commitments (compliance 
issues) 
• Similar to the FAR interim rule, the in terim OMB guidance does not consider those 
cases where an entity, covered by the US  commitments under the GPA procures 
jointly with an entity which is not part of the US commitments under the GPA.  
What is the applicable regime?  Does the US intend to clarify this situation in the 
final guidance? 
 
US Response
: The United States is unable to comment on any changes that may be made to the 
interim OMB Guidance.  However, as noted above, where a procurement is undertaken jointly by an 
entity with an international obligation and an en tity that does not have such an obligation, the 
procurement will be conducted in a manner that ensures that the inte rnational obligation is honored.  
That means that products from ARRA designated count ries will not be subject to the restrictions of 
Section 1605 of ARRA.  
• The interim OMB guidance does not foresee the case of a joint federal and sub-
federal procurement, and therefore does not provide any guidance on the 
procurement rules and treatment of foreign s uppliers in this situation.  Does the US 
intend to clarify this situation in the OMB final guidance? 
 
US Response
: The United States is unable to comment on any changes that may be made to the 
interim OMB guidance. 
 
• The issue of the relationship between the scope of the exception included under 
Annex 2 of the US Appendix I in the GPA and the scope of the ARRA "Buy American" provision, which targets the use of steel in public buildings and public works, is not addressed in the interim OMB guidance.  Does the US intend to clarify 
this issue in the final guidance? 
 
US Response
: The United States is unable to comment on any changes that may be made to the 
interim OMB guidance.  However, where a state th at is listed in Annex 2 of the GPA or other 
international agreement has an exception for constr uction grade steel, that state will apply the "buy 
American" requirement in Section 1605 to the pur chase of such steel in any ARRA-funded project. 
 
• Does the US intend to further define in the final guidance the procedure by which 
contracting officers will, in the notices, inform  recipients that the financial assistance 
is to be used in a contract fully or partially subject to the GPA sub-federal 
commitments and thus that designated country suppliers shall be treated as domestic suppliers? 
 
US Response
: The United States is unable to comment on any changes that may be made to the 
interim OMB guidance. 
 
• Could the US confirm that financial assi stance provided to sub-federal recipients 
with GPA commitments will not be able to be  further passed to other local entities 
and thus permitting that sub-federal recipients to avoid their GPA commitments by doing so?
 
 US Response
: The US General Note 2 of the GPA provid es that:  "Except as specified otherwise in 
this Appendix, procurement in terms of US covera ge does not include non-contractual agreements or 
any form of government assistance, including coopera tive agreements, grants, loans, equity infusions,  GPA/W/307 
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  guarantees, fiscal incentives...".  This exclusion a pplies to all the government entities covered by the 
Agreement.  That means that where a state that is listed in an international agreement provides grants, 
loans or other types of financial assistance to a local government entity, it would not be considered 
procurement by the state government, but rather would be considered a procurement by the local entity undertaking the procurement. 
 
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