12698 Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 90–46; FAR Case 91–119; Item VI]

RIN 9000–AG81

Federal Acquisition Regulation; Buy

American Act—Construction

(Grimberg Decision)

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council have

agreed on a final rule amending the

Federal Acquisition Regulation (FAR) to

add guidance on pre-award and postaward exceptions to the Buy American

Act for construction, and also to provide

guidance regarding instances of

noncompliance with the Buy American

Act. This regulatory action was not

subject to Office of Management and

Budget review under Executive Order

12866, dated September 30, 1993. This

is not a major rule under 5 U.S.C. 804.

DATES: Effective May 16, 1997.

FOR FURTHER INFORMATION CONTACT: Mr.

Paul Linfield at (202) 501–1757 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4037, GS Building,

Washington, DC 20405 (202) 501–4755.

Please cite FAC 90–46, FAR case 91–

119.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the

Federal Register at 60 FR 67028,

December 27, 1995. The revisions in the

final rule are based on the analysis of

public comments and further

clarification of the rule. The final rule—

—Permits the contracting officer to

specify in the solicitation if there is

insufficient time to consider requests

for determinations under the Buy

American Act in advance of receipt of

offers;

—Uses more precise terminology for

determinations regarding the

inapplicability of the Buy American

Act;

—Adds guidance regarding exceptions

to the Buy American Act that are

based on the Trade Agreements Act

and North American Free Trade

Agreement; and

—Clarifies when supporting information

and price comparisons are needed.

B. Regulatory Flexibility Act

The Department of Defense, the

General Services Administration, and

the National Aeronautics and Space

Administration certify that this final

rule will not have a significant

economic impact on a substantial

number of small entities within the

meaning of the Regulatory Flexibility

Act, 5 U.S.C. 601, et seq., because the

rule does not change the impact of the

Buy American Act or alter the

exceptions to the Act, but only clarifies

the procedures for implementation of

the Act.

C. Paperwork Reduction Act

The Paperwork Reduction Act is

deemed to apply because the clauses at

FAR 52.225–5 and 52.225–15 require

offerors/contractors requesting a

determination regarding the

inapplicability of the Buy American Act

to provide the Government with certain

information relating to foreign

construction material the offeror/

contractor proposes to use on the

contract. A request for clearance of the

information collection requirement

previously was submitted to the Office

of Management and Budget (OMB)

under 44 U.S.C. 3501, et seq., and

approved through February 28, 1999,

under OMB Control Number 9000–0141.

List of Subjects in 48 CFR Parts 25 and

52

Government procurement.

Dated: March 7, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 25 and 52 are

amended as set forth below:

1. The authority citation for 48 CFR

Parts 25 and 52 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C.

chapter 137; and 42 U.S.C. 2473(c).

PART 25—FOREIGN ACQUISITION

25.108 [Amended]

2. Section 25.108 is amended in

paragraph (b) by removing

‘‘25.202(a)(3)’’ and inserting

‘‘25.202(a)(2)’’.

25.201 [Amended]

3. Section 25.201 is amended in the

definition of ‘‘Domestic construction

material’’ by removing ‘‘25.202(a)(3)’’

and inserting ‘‘25.202(a)(2)’’.

4. Subpart 25.2 is amended by

revising sections 25.202 through 25.205

and adding sections 25.206 and 25.207

to read as follows:

25.202 Policy.

(a) The Buy American Act requires

that only domestic construction

materials be used in construction in the

United States, except when—

(1) The cost would be unreasonable,

i.e., the cost of domestic construction

material exceeds the cost of foreign

construction material by more than 6

percent, unless the agency head

determines a higher percentage to be

appropriate (see Executive Order

10582);

(2) The head of the contracting

activity or designee determines the

construction material is not mined,

produced, or manufactured in the

United States in sufficient and

reasonably available commercial

quantities of a satisfactory quality (see

25.108);

(3) The agency head determines that

application of the restrictions of the Buy

American Act to a particular

construction material would be

impracticable; or

(4) The agency head determines that

application of the restrictions of the Buy

American Act to a particular

construction material would be

inconsistent with the public interest.

Under this authority, agencies may have

agreements with foreign governments

that provide blanket exceptions to the

Buy American Act (e.g., Trade

Agreements Act and North American

Free Trade Agreement (NAFTA)).

(b) Unless the contracting officer

determines that insufficient time is

available, offerors should request

determinations regarding the

inapplicability of the Buy American Act

in time to allow determination before

submission of offers.

(c) When it is determined for any of

the reasons stated in this section that

certain foreign construction materials

may be used, the excepted materials

shall be listed in the contract. Findings

justifying the exception shall be

available for public inspection.

(d) For construction contracts with an

acquisition value of $6,500,000 or more,

but less than $7,311,000, see

25.402(a)(3). If the acquisition value is

$7,311,000 or more, see 25.402(a)(1).

25.203 Determinations requested before

submission of offers.

(a) Any request for a determination

regarding the inapplicability of the Buy

American Act made before receipt of

offers shall be evaluated based on the

information requested in the applicable

clause at 52.225–5, Buy American Act—

Construction Materials, paragraphs (c)

and (d), or 52.225–15, Buy American

Act—Construction Materials under

Trade Agreements Act and North
Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations 12699

American Free Trade Agreement,

paragraphs (c) and (d), and may be

supplemented by other information

readily available to the contracting

officer.

(b) If the Government determines

before receipt of offers that an exception

to the Buy American Act applies (other

than a general exception based on the

Trade Agreements Act or NAFTA), the

excepted material shall be identified by

the Government in the clause at 52.225–

5(b)(2) or 52.225–15(b)(3).

25.204 Evaluating offers of foreign

construction material.

(a) Offerors proposing to use foreign

construction material other than that

listed by the Government in the

applicable clause at 52.225–5(b)(2) or

52.225–15(b)(3) or excepted under the

Trade Agreements Act or NAFTA

(52.225-15(b)(2)) must provide the

information required by paragraphs (c)

and (d) of the respective clauses.

(b) Unless agency regulations specify

a higher percentage, the Government

will add to the offered price 6 percent

of the cost of any foreign construction

material proposed for exception from

the requirements of the Buy American

Act based on the unreasonable cost of

domestic construction materials. If the

evaluation of offers results in a tie

between an offer including foreign

construction material excepted on the

basis of unreasonable cost, as evaluated,

and an offer including solely domestic

construction material or other foreign

construction material that is excepted

by the Government in the solicitation

under the clause at 52.225–5(b) (2) or

52.225–15(b)(2) or (3) or subsequently

excepted on a basis other than

unreasonable cost, award shall be made

to the offeror that submitted the latter

offer.

(c) Offerors also may submit alternate

offers based on use of equivalent

domestic construction material to avoid

possible rejection of the entire offer, if

the Government determines that an

exception permitting use of a particular

foreign construction material does not

apply.

(d) If, upon evaluation of an offer, the

Government determines that an

exception to the Buy American Act

applies, and the Government accepts

that offer, the excepted material shall be

listed in the contract at 52.225–5(b)(2)

or 52.225–15(b)(3).

25.205 Postaward determinations.

(a) If a contractor requests a

determination regarding the

inapplicability of the Buy American Act

after contract award, the contractor shall

explain why the determination could

not have been requested before contract

award or why the need for such

determination otherwise was not

reasonably foreseeable. If the contractor

does not submit a satisfactory

explanation, the Government need not

make a determination regarding the

inapplicability of the Buy American

Act.

(b) Evaluation of any request for a

determination regarding the

inapplicability of the Buy American Act

made after contract award shall be based

on information similar to that required

before award by the applicable clause at

52.225–5 (c) and (d) or 52.225–15 (c)

and (d) and/or other information readily

available to the contracting officer.

(c) If a determination is made after

contract award that an exception to the

Buy American Act applies, the contract

shall be modified to allow use of foreign

construction material, and adequate

consideration shall be negotiated.

However, when the basis for the

exception is the unreasonable price of a

domestic construction material,

adequate consideration shall not be less

than the differential established in

25.202(a)(1) or agency procedures.

25.206 Noncompliance.

(a) The contracting officer is

responsible for conducting Buy

American Act investigations when

available information indicates such

action is warranted.

(b) Unless fraud is suspected, the

contracting officer shall notify the

contractor of the apparent unauthorized

use of foreign construction material and

request a reply, to include proposed

corrective action.

(c) If an investigation reveals that a

contractor or subcontractor has used

foreign construction material without

authorization, the contracting officer

shall take appropriate action, including

one or more of the following:

(1) Process a determination with

regard to inapplicability of the Buy

American Act in accordance with

25.205.

(2) Consider requiring the removal

and replacement of the unauthorized

foreign construction material.

(3) If removal and replacement of

foreign construction material

incorporated in a building or work

would be impracticable, cause undue

delay, or otherwise be detrimental to the

interests of the Government, the

contracting officer may determine in

writing that the foreign construction

material need not be removed and

replaced. Such a determination to retain

foreign construction material does not

constitute a determination that an

exception to the Buy American Act

applies, and this should be so stated in

the determination. Further, such a

determination to retain foreign

construction material does not affect the

Government’s right to suspend and/or

debar a contractor, subcontractor, or

supplier for violation of the Buy

American Act, or to exercise other

contractual rights and remedies, such as

reducing the contract price or

terminating the contract for default.

(4) If the noncompliance is

sufficiently serious, consider exercising

appropriate contractual remedies, such

as terminating the contract for default.

Also consider preparing and forwarding

a report for suspension and/or

debarment, including findings and

supporting evidence in accordance with

subpart 9.4, Debarment, Suspension,

and Ineligibility. If the noncompliance

appears to be fraudulent, consider

referring the matter to other appropriate

agency officials, such as the officer

responsible for criminal investigation

and prosecution.

25.207 Solicitation provisions and

contract clauses.

(a) The contracting officer shall insert

the clause at 52.225–5, Buy American

Act—Construction Materials, in

solicitations and contracts for

construction inside the United States,

except when the clause at 52.225–15,

Buy American Act—Construction

Materials under Trade Agreements Act

and North American Free Trade

Agreement, is prescribed.

(b)(1) The contracting officer shall

insert the provision at 52.225–12, Notice

of Buy American Act Requirement—

Construction Materials, in solicitations

for construction that contain the clause

at 52.225–5, Buy American Act—

Construction Materials.

(2) If the contracting officer

determines that insufficient time is

available to process a determination

regarding the inapplicability of the Buy

American Act prior to receipt of offers,

the contracting officer shall use the

provision with its Alternate I.

(c)(1) The contracting officer shall

insert the provision at 52.225–13, Notice

of Buy American Act Requirement—

Construction Materials under Trade

Agreements Act and North American

Free Trade Agreement, in solicitations

for construction that contain the clause

at 52.225–15, Buy American Act—

Construction Materials under Trade

Agreements Act and North American

Free Trade Agreement.

(2) If the contracting officer

determines that insufficient time is

available to process a determination

regarding the inapplicability of the Buy

American Act prior to receipt of offers,
12700 Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations

the contracting officer shall use the

provision with its Alternate I.

(d)(1) The contracting officer shall

insert the clause at 52.225–15, Buy

American Act—Construction Materials

under Trade Agreements Act and North

American Free Trade Agreement, in

solicitations and contracts for

construction inside the United States

with an estimated acquisition value of

$7,311,000 or more.

(2) For solicitations and contracts for

construction inside the United States

with an estimated acquisition value of

$6,500,000 or more, but less than

$7,311,000, the contracting officer shall

use the clause with its Alternate I.

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

5. Section 52.225–5 is amended by

revising the introductory paragraph;

revising the clause date; revising

paragraph (a) introductory text; by

removing the phrase ‘‘as used in this

clause’’ from the definitions of

‘‘Components’’, ’’Construction material’’

and ‘‘Domestic construction material’’;

by removing from the definition of

Domestic construction material’’

‘‘25.202(a)(3)’’ and inserting

‘‘25.202(a)(2)’’; by revising paragraph (b)

(the undesignated paragraph following

paragraph (b) is removed); and adding

paragraphs (c) and (d) to read as follows:

52.225–5 Buy American Act—Construction

Materials.

As prescribed in 25.207(a), insert the

following clause:

Buy American Act—Construction Materials

(May 1997)

(a) Definitions. As used in this clause—

* * * * *

(b)(1) The Buy American Act (41 U.S.C.

10a–10d) requires that only domestic

construction material be used in performing

this contract, except as provided in

paragraphs (b)(2) and (b)(3) of this clause.

(2) This requirement does not apply to the

excepted construction material or

components listed by the Government as

follows:

lllllllllllllllllllll

(List applicable accepted materials or

indicate ‘‘none’’)

(3) Other foreign construction material may

be added to the list in paragraph (b)(2) of this

clause if the Government determines that—

(i) The cost would be unreasonable (the

cost of a particular domestic construction

material shall be determined to be

unreasonable when the cost of such material

exceeds the cost of foreign material by more

than 6 percent, unless the agency head

determines a higher percentage to be

appropriate);

(ii) The application of the restriction of the

Buy American Act to a particular

construction material would be impracticable

or inconsistent with the public interest; or

(iii) The construction material is not

mined, produced, or manufactured in the

United States in sufficient and reasonably

available commercial quantities of a

satisfactory quality.

(4) The Contractor agrees that only

domestic construction material will be used

by the Contractor, subcontractors, material

men, and suppliers in the performance of this

contract, except for foreign construction

materials, if any, listed in paragraph (b)(2) of

this clause.

(c) Request for determination. (1)

Contractors requesting to use foreign

construction material under paragraph (b)(3)

of this clause shall provide adequate

information for Government evaluation of the

request for a determination regarding the

inapplicability of the Buy American Act.

Each submission shall include a description

of the foreign and domestic construction

materials, including unit of measure,

quantity, price, time of delivery or

availability, location of the construction

project, name and address of the proposed

contractor, and a detailed justification of the

reason for use of foreign materials cited in

accordance with paragraph (b)(3) of this

clause. A submission based on unreasonable

cost shall include a reasonable survey of the

market and a completed price comparison

table in the format in paragraph (d) of this

clause. The price of construction material

shall include all delivery costs to the

construction site and any applicable duty

(whether or not a duty-free certificate may be

issued).

(2) If the Government determines after

contract award that an exception to the Buy

American Act applies, the contract shall be

modified to allow use of the foreign

construction material, and adequate

consideration shall be negotiated. However,

when the basis for the exception is the

unreasonable price of a domestic

construction material, adequate

consideration shall not be less than the

differential established in paragraph (b)(3)(i)

of this clause.

(3) If the Government does not determine

that an exception to the Buy American Act

applies, the use of that particular foreign

construction material will be a failure to

comply with the Act.

(d) For evaluation of requests under

paragraph (c) of this clause based on

unreasonable cost, the following information

and any applicable supporting data based on

the survey of suppliers shall be included in

the request:

FOREIGN AND DOMESTIC CONSTRUCTION MATERIALS PRICE COMPARISON

Construction material description Unit of

measure Quantity Price(dollars) 1

Item 1:

Foreign construction material ................................................................................................ ........................ ........................ ........................

Domestic construction material ............................................................................................. ........................ ........................ ........................

Item 2:

Foreign construction material ................................................................................................ ........................ ........................ ........................

Domestic constructionmaterial .............................................................................................. ........................ ........................ ........................

List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.

Include other applicable supporting information.

1 Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free entry certificate is issued).

(End of clause)

6. Sections 52.225–12 and 52.225–13

are added to read as follows:

52.225–12 Notice of Buy American Act

Requirement-Construction Materials.

As prescribed in 25.207(b), insert the

following provision:

Notice of Buy American Act RequirementConstruction Materials (May 1997)

(a) Offerors are required to comply with the

requirements of Federal Acquisition

Regulation (FAR) clause 52.225–5, Buy

American Act Construction Materials, of this

solicitation. The terms ‘‘construction

material’’ and ‘‘domestic construction

material,’’ as used in this provision, have the

meanings set forth in FAR clause 52.225–5.

(b) Offerors should request a determination

regarding the inapplicability of the Buy

American Act in time to allow determination

before submission of offers. For evaluation of

a request for a determination regarding the

inapplicability of the requirements of the Buy

American Act prior to the time set for receipt

of offers, the information and applicable

supporting data required by paragraphs (c)

and (d) of FAR clause 52.225–5 shall be

included in the request. If an offeror has not

requested a detemination regarding the

inapplicability of the Buy American Act prior

to submission of its offer, or has not received
Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations 12701

a response to a request made prior to

submission of its offer, the information and

supporting data shall be included in the

offer.

(c) Evaluation of offers. (1) For evaluation

of offers, (unless agency regulations specify

a higher percentage) the Government will

add to the offered price 6 percent of the cost

of any foreign construction material proposed

for exception from the requirements of the

Buy American Act based on claimed

unreasonable cost of domestic construction

materials in accordance with paragraph

(b)(3)(i) of FAR clause 52.225–5.

(2) If the evaluation of offers results in a

tie between an offer including such foreign

construction material excepted on the basis

of unreasonable cost, as evaluated, and an

offer including solely domestic construction

material or other foreign construction

material listed in the solicitation at paragraph

(b)(2) of FAR clause 52.225–5, or

subsequently excepted in accordance with

paragraphs (b)(3) (ii) or (iii) of FAR clause

52.225–5, award shall be made to the offeror

that submitted the latter offer.

(d) Alternate offers. (1) When an offer

includes foreign construction material not

listed by the Government in the solicitation

at paragraph (b)(2) of FAR clause 52.225–5,

offerors also may submit alternate offers

based on use of equivalent domestic

construction material.

(2) If alternate offers are submitted, a

separate Standard Form 1442 shall be

submitted for each alternate offer, and a

separate price comparison table, prepared in

accordance with paragraphs (c) and (d) of

FAR clause 52.225-5, shall be submitted for

each offer that is based on the use of any

foreign construction material for which the

Government has not yet determined an

exception to apply.

(3) If the Government determines that a

particular exception requested under

paragraph (c) of FAR clause 52.225–5 does

not apply, the Government will evaluate only

those offers based on use of the equivalent

domestic construction material, and the

offeror shall be required to furnish such

domestic construction material.

(i) In sealed bid procurements, any offer

based on use of that particular foreign

construction material shall be rejected as

nonresponsive.

(ii) In negotiated procurements, any offer

based on use of that particular foreign

construction material may not be accepted

unless revised during negotiations.

(End of provision)

Alternate I. (MAY 1997) As prescribed in

25.207(b)(2), substitute the following

paragraph (b) for paragraph (b) of the basic

provision:

(b) An offeror requesting a determination

regarding the inapplicability of the Buy

American Act shall submit such request with

its offer, including the information and

applicable supporting data required by

paragraphs (c) and (d) of FAR clause 52.225–

5.

52.225–13 Notice of Buy American Act

Requirement—Construction Materials under

Trade Agreements Act and North American

Free Trade Agreement.

As prescribed in 25.207(c)(1), insert

the following provision:

Notice of Buy American Act Requirement—

Construction Materials under Trade

Agreements Act and North American Free

Trade Agreement (May 1997)

(a) Offerors are required to comply with the

requirements of Federal Acquisition

Regulation (FAR) clause 52.225–15, Buy

American Act—Construction Materials

Under Trade Agreements Act and North

American Free Trade Agreement, of this

solicitation. The terms defined in FAR clause

52.225–15 have the same meaning in this

provision.

(b) Offerors should request a determination

regarding the inapplicability of the Buy

American Act in time to allow determination

before submission of offers. For evaluation of

a request for a determination regarding the

inapplicability of the requirements of the Buy

American Act prior to the time set for receipt

of offers, the information and applicable

supporting data required by paragraphs (c)

and (d) of FAR clause 52.225–15 shall be

included in the request. If an offeror has not

requested a determination regarding the

inapplicability of the Buy American Act prior

to submission of its offer, or has not received

a response to a request made prior to

submission of its offer, the information and

supporting data shall be included in the

offer.

(c) Evaluation of offers. (1) For evaluation

of offers, (unless agency regulations specify

a higher percentage) the Government will

add to the offered price 6 percent of the cost

of any foreign construction material proposed

for exception from the requirements of the

Buy American Act based on claimed

unreasonable cost of domestic construction

materials in accordance with paragraph

(b)(4)(i) of FAR clause 52.225–15.

(2) If the evaluation of offers results in a

tie between an offer including such foreign

construction material excepted on the basis

of unreasonable cost, as evaluated, and an

offer including solely domestic construction

material or other foreign construction

material, listed in the solicitation at

paragraph (b)(3) of FAR clause 52.225–15, or

subsequently excepted in accordance with

paragraphs (b)(4)(ii) or (iii) of FAR clause

52.225–15, award shall be made to the offeror

that submitted the latter offer.

(d) Alternate offers. (1) When an offer

includes foreign construction material not

listed by the Government in the solicitation

at paragraph (b)(3) of FAR clause 52.225–15,

offerors also may submit alternate offers

based on use of equivalent domestic

construction material.

(2) If alternate offers are submitted, a

separate Standard Form 1442 shall be

submitted for each alternate offer, and a

separate price comparison table, prepared in

accordance with paragraphs (c) and (d) of

FAR clause 52.225–15, shall be submitted for

each offer that is based on the use of any

foreign construction material for which the

Government has not yet determined an

exception to apply.

(3) If the Government determines that a

particular exception requested under

paragraph (c) of FAR clause 52.225–15 does

not apply, the Government will evaluate only

those offers based on use of the equivalent

domestic construction material, and the

offeror shall be required to furnish such

domestic construction material.

(i) In sealed bid procurements, any offer

based on use of that particular foreign

construction material shall be rejected as

nonresponsive.

(ii) in negotiated procurements, any offer

based on use of that particular foreign

construction material may not be accepted

unless revised during negotiations.

(End of provision)

Alternate I (MAY 1997). As prescribed in

25.207(c)(2), substitute the following

paragraph (b) for paragraph (b) of the basic

provision:

(b) An offeror requesting a determination

regarding the inapplicability of the Buy

American Act shall submit such request with

its offer, including the information and

applicable supporting data required by

paragraphs (c) and (d) of FAR clause 52.225–

15.

7. Section 52.225–15 is amended by

revising the introductory paragraph, and

the clause date; in the definition of

‘‘Domestic construction material’’ by

removing ‘‘25.202(a)(3)’’ and inserting

‘‘25.202(a)(2)’’; by revising paragraphs

(b) and (c); and by adding paragraph (d)

to read as follows:

52.225–15 Buy American Act—

Construction Materials under Trade

Agreements Act and North American Free

Trade Agreement.

As prescribed in 25.207(d), insert the

following clause:

Buy American Act—Construction Materials

Under Trade Agreements Act and North

American Free Trade Agreement (May 1997)

* * * * *

(b)(1) The Buy American Act (41 U.S.C.

10a—10d) requires that only domestic

construction material be used in performing

this contract, except as provided in

paragraphs (b)(2), (b)(3), and (b)(4) of this

clause.

(2) The Trade Agreements Act and the

North American Free Trade Agreement

(NAFTA) provide that designated country

and NAFTA country construction materials

are exempted from application of the Buy

American Act.

(3) The requirement in paragraph (b)(1) of

this clause does not apply to the excepted

construction material or components listed

by the Government as follows:

lllllllllllllllllllll

(List applicable accepted materials or

indicate ‘‘none’’)

(4) Other foreign construction material may

be added to the list in paragraph (b)(3) of this

clause if the Government determines that—

(i) The cost would be unreasonable (the

cost of a particular domestic construction

material shall be determined to be

unreasonable when the cost of such material
12702 Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations

exceeds the cost of foreign material by more

than 6 percent, unless the agency head

determines a higher percentage to be

appropriate);

(ii) The application of the restriction of the

Buy American Act to a particular

construction material would be impracticable

or inconsistent with the public interest; or

(iii) The construction material is not mined,

produced, or manufactured in the United

States in sufficient and reasonably available

commercial quantities of a satisfactory

quality.

(5) The Contractor agrees that only

domestic construction materials, NAFTA

country construction materials, or designated

country construction materials will be used

by the Contractor, subcontractors, material

men, and suppliers in the performance of this

contract, except for foreign construction

materials, if any, listed in paragraph (b)(3) of

this clause.

(c) Request for determination. (1)

Contractors requesting to use foreign

construction material under paragraph (b)(4)

of this clause shall provide adequate

information for Government evaluation of the

request for a determination regarding the

inapplicability of the Buy American Act.

Each submission shall include a description

of the foreign and domestic construction

materials, including unit of measure,

quantity, price, time of delivery or

availability, location of the construction

project, name and address of the proposed

contractor, and a detailed justification of the

reason for use of foreign materials cited in

accordance with paragraph (b)(4) of this

clause. A submission based on unreasonable

cost shall include a reasonable survey of the

market and a completed price comparison

table in the format in paragraph (d) of this

clause. The price of construction material

shall include all delivery costs to the

construction site and any applicable duty

(whether or not a duty-free certificate may be

issued).

(2) If the Government determines after

contract award that an exception to the Buy

American Act applies, the contract shall be

modified to allow use of the foreign

construction material, and adequate

consideration shall be negotiated. However,

when the basis for the exception is the

unreasonable price of a domestic

construction material, adequate

consideration shall not be less than the

differential established in paragraph (b)(4)(i)

of this clause.

(3) If the Government does not determine

that an exception to the Buy American Act

applies, the use of that particular foreign

construction material will be a failure to

comply with the Act.

(d) For evaluation of requests under

paragraph (c) of this clause based on

unreasonable cost, the following information

and any applicable supporting data based on

the survey of suppliers shall be included in

the request:

FOREIGN AND DOMESTIC CONSTRUCTION MATERIALS PRICE COMPARISON

Construction material description Unit of

measure Quantity Price(dollars) 1

Item 1:

Foreign construction material ................................................................................................ ........................ ........................ ........................

Domestic construction material ............................................................................................. ........................ ........................ ........................

Item 2:

Foreign construction material ................................................................................................ ........................ ........................ ........................

Domestic construction material ............................................................................................. ........................ ........................ ........................

List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.

Include other applicable supporting information.

1 Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free entry certificate is issued).

(End of clause)

Alternate I (MAY 1997). As prescribed in

25.207(d)(2), substitute the following

paragraphs (b)(2) and (b)(5) for paragraphs

(b)(2) and (b)(5) of the basic clause:

(b)(2) The North American Free Trade

Agreement (NAFTA) provides that NAFTA

construction materials are exempted from

application of the Buy American Act.

(b)(5) The Contractor agrees that only

domestic construction materials or NAFTA

country construction materials will be used

by the Contractor, subcontractors, material

men, and suppliers in the performance of this

contract, except for other foreign

construction materials, if any, listed in

paragraph (b)(3) of this clause.

52.225–22 [Amended]

8. Section 52.225–22 is amended by

revising the clause date to read ‘‘(MAY

1997)’’; and in the definition of

‘‘Domestic construction material’’ by

removing ‘‘25.202(a)(3)’’ and inserting

‘‘25.202(a)(2)’’.

[FR Doc. 97–6315 Filed 3–14–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 26 and 52

[FAC 90–46; FAR Case 95–306; Item VII]

RIN 9000–AH02

Federal Acquisition Regulation;

Collection of Historically Black

Colleges and Universities/Minority

Institutions Award Data

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council have

agreed on a final rule amending the

Federal Acquisition Regulation (FAR) to

implement Executive Order 12928,

which requires agencies to provide

periodic reporting on the progress made

in award of contracts to Historically

Black Colleges and Universities and

Minority Institutions. This regulatory

action was not subject to Office of

Management and Budget review under

Executive Order 12866, dated

September 30, 1993. This is not a major

rule under 5 U.S.C. 804.

DATES: Effective May 16, 1997.

FOR FURTHER INFORMATION CONTACT: Ms.

Linda Klein at (202) 501–3775 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4037, GS Building,

Washington, DC 20405 (202) 501–4755.

Please cite FAC 90–46, FAR case 95–

306.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR Parts 26

and 52 to implement Executive Order

12928, which states that agencies will

provide periodic reporting on their

progress made in awards to Historically

Black Colleges and Universities and

Minority Institutions. The rule contains

a new FAR subpart and solicitation

provision.

A proposed rule was published in the

Federal Register at 61 FR 31792, June

20, 1996. Five sources submitted

comments in response to the proposed