Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations 14623 

and include the rationale for using other 

than a fixed-price and/or competitive 

approach. Parts 8, 13, and 16 are 

amended to reflect the new posting 

requirements for orders at Subpart 5.7. 

Item IV—American Recovery and 

Reinvestment Act of 2009 (The 

Recovery Act)—Reporting 

Requirements (Interim) (FAR Case 

2009–009) 

This interim rule implements section 

1512 of Division A of the American 

Recovery and Reinvestment Act of 2009, 

which requires contractors to report on 

their use of Recovery Act funds. The 

rule adds a new subpart 4.15, and a new 

clause, 52.204–11. Contracting officers 

must include the new clause in 

solicitations and contracts funded in 

whole or in part with Recovery Act 

funds, except classified solicitations and 

contracts. This clause applies to 

Commercial item contracts and 

Commercially-Available-Off-The-Shelf 

(COTS) item contracts as well as actions 

under the Simplified Acquisition 

Threshold. 

Contracting officers who wish to use 

Recovery Act funds on existing 

contracts should modify those contracts 

to add the clause. 

Reports from contractors for all work 

funded, in whole or in part, by the 

Recovery Act, and for which an invoice 

is submitted prior to June 30, 2009, are 

due no later than July 10, 2009. 

Thereafter, reports shall be submitted no 

later than the 10th day after the end of 

each calendar quarter. 

Item V—American Recovery and 

Reinvestment Act of 2009 (The 

Recovery Act)—GAO/IG Access 

(Interim) (FAR Case 2009–011) 

The Civilian Agency Acquisition 

Council and the Defense Acquisition 

Regulations Council (Councils) are 

issuing an interim rule amending the 

Federal Acquisition Regulation (FAR) to 

implement Sections 902, 1514, and 1515 

of the American Recovery and 

Reinvestment Act of 2009. Collectively, 

these Sections provide for the audit and 

review of both contracts and 

subcontracts, and the ability to 

interview such contractor and 

subcontractor personnel under contracts 

containing Recovery Act funds. 

These Recovery Act provisions are 

implemented in new alternate clauses to 

52.212–5, ‘‘Contract Terms and 

Conditions Required to Implement 

Statutes orExecutive Orders— 

Commercial Items’’, 52–214–26, ‘‘Audit 

and Records—Sealed Bidding,’’ and 

52.215–2, ‘‘Audit and Records— 

Negotiation’’. For the Comptroller 

General these alternate clauses provide 

specific authority to audit contracts and 

subcontracts and to interview contractor 

and subcontractor employees under 

contracts using Recovery Act funds. 

Agency inspector generals receive the 

same authorities, with the exception of 

interviewing subcontractor employees. 

Item VI—GAO Access to Contractor 

Employees (Interim) (FAR Case 2008– 

026) 

This interim rule amends the Federal 

Acquisition Regulation (FAR) Parts 12 

and 52. Clauses 52.215–2, Audit and 

Records—Negotiation and 52.214–26, 

Audit and Records—Sealed Bidding are 

being modified to allow the Government 

Accountability Office to interview 

current contractor employees when 

conducting audits. The rule will not 

apply to the acquisition of commercial 

items; therefore, FAR 12.503 will be 

amended to add the exemption of this 

rule. This change implements Section 

871 of the Duncan Hunter National 

Defense Authorization Act for Fiscal 

Year 2009 (NDAA) (Pub. L. 110–417). 

Dated: March 25, 2009. 

Al Matera, 

Director, Office of Acquisition Policy. 

Federal Acquisition Circular 

Federal Acquisition Circular (FAC) 

2005–32 is issued under the authority of 

the Secretary of Defense, the 

Administrator of General Services, and 

the Administrator for the National 

Aeronautics and Space Administration. 

Unless otherwise specified, all 

Federal Acquisition Regulation (FAR) 

and other directive material contained 

in FAC 2005–32 is effective March 31, 

2009. 

Dated: March 24, 2009. 

Shay D. Assad, 

Director, Defense Procurement And 

Acquisition Policy. 

Dated: March 24, 2009. 

Rodney P. Lantier, 

Acting Senior Procurement Executive & 

Acting Deputy Chief Acquisition Officer 

Office of the Chief Acquisition Officer U.S. 

General Services Administration. 

Dated: March 24, 2009. 

William P. McNally, 

Assistant Administrator for Procurement, 

National Aeronautics and Space 

Administration. 

[FR Doc. E9–7027 Filed 3–30–09; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 1, 5, 25, and 52 

[FAC 2005–32; FAR Case 2009–008; 

Item I; Docket 2009–0008, Sequence 1] 

RIN 9000–AL22 

Federal Acquisition Regulation; FAR 

Case 2009–008, American Recovery 

and Reinvestment Act of 2009 (the 

Recovery Act)—Buy American 

Requirements for Construction 

Material 

AGENCY: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on an interim 

rule amending the Federal Acquisition 

Regulation (FAR) to implement the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5) (Recovery 

Act) with respect to the Buy American 

provision, section 1605 in Division A. 

This rule does not cover procurements 

funded with Federal financial assistance 

such as Federal grants. Additional 

guidance will be provided by the Office 

of Management and Budget with respect 

to the application of section 1605 to 

procurements funded with Federal 

financial assistance. 

DATES: Effective Date: March 31, 2009. 

Applicability Date: The rule applies to 

solicitations issued and contracts 

awarded on or after the effective date of 

this rule. Contracting officers shall 

modify, on a bilateral basis, in 

accordance with FAR 1.108(d)(3), 

existing contracts to include the FAR 

clauses for future orders, if Recovery 

Act funds will be used. In the event that 

a contractor refuses to accept such a 

modification, the contractor will not be 

eligible for receipt of Recovery Act 

funds. 

Comment Date: Interested parties 

should submit written comments to the 

FAR Secretariat on or before June 1, 

2009 to be considered in the 

formulation of a final rule. 

ADDRESSES: Submit comments 

identified by FAC 2005–32, FAR case 

2009–008, by any of the following 

methods: 


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14624 Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations 

• Regulations.gov: http:// 

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

inputting ‘‘FAR Case 2009–008’’ under 

the heading ‘‘Comment or Submission’’. 

Select the link ‘‘Send a Comment or 

Submission’’ that corresponds with FAR 

Case 2009–008. Follow the instructions 

provided to complete the ‘‘Public 

Comment and Submission Form’’. 

Please include your name, company 

name (if any), and ‘‘FAR Case 2009– 

008’’ on your attached document. 

• Fax: 202–501–4067. 

• Mail: General Services 

Administration, FAR Secretariat (VPR), 

1800 F Street, NW., Room 4041, Attn: 

Hada Flowers, Washington, DC 20405. 

Instructions: Please submit comments 

only and cite FAC 2005–32, FAR case 

2009–008, 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. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Meredith Murphy, Procurement 

Analyst, at (202) 208–6925 for 

clarification of content. Please cite FAC 

2005–32, FAR case 2009–008. For 

information pertaining to status or 

publication schedules, contact the FAR 

Secretariat at (202) 501–4755. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This interim rule implements the 

Recovery Act with respect to the unique 

Buy American provision, section 1605 

of the Recovery Act, by adding a new 

Subpart 25.6, entitled ‘‘American 

Recovery and Reinvestment Act—Buy 

American Act—Construction 

Materials,’’ and adding new provisions 

and clauses at Part 52, with conforming 

changes to Subparts 1.1, 5.2, 25.0, 25.2, 

and 25.11. 

On February 17, 2009, the President 

signed Public Law 111–5, the American 

Recovery and Reinvestment Act of 2009, 

which includes a number of provisions 

to be implemented in Federal 

Government contracts. Among these 

provisions is section 1605, entitled 

‘‘Buy American.’’ It prohibits the use of 

funds appropriated or otherwise made 

available by the Act for any project for 

the construction, alteration, 

maintenance, or repair of a public 

building or public work unless all of the 

iron, steel, and manufactured goods 

used in the project are produced in the 

United States. The law requires that this 

prohibition be applied in a manner 

consistent with U.S. obligations under 

international agreements, and it 

provides for waiver under three 

circumstances: 

1. Iron, steel, or manufactured goods 

are not produced in the United States in 

sufficient and reasonably available 

quantities and of a satisfactory quality; 

2. Inclusion of iron, steel, or 

manufactured goods produced in the 

United States will increase the cost of 

the contract by more than 25 percent; or 

3. Applying the domestic preference 

would be inconsistent with the public 

interest. 

The implementation of section 1605 is 

expected to stimulate the economy by 

increasing and maintaining jobs in the 

United States in the steel, iron, and 

manufactured construction materials 

industries and providing new 

opportunities to construction firms to 

win contracts for construction and 

public works projects. 

B. Discussion 

Because of the need to appropriately 

segregate the unique Buy-American 

provisions of the Recovery Act from the 

requirements of the Buy American Act 

and the Trade Agreements Act, the 

Councils have decided to include them 

in a separate subpart of FAR Part 25. 

Subpart 25.6, currently reserved, will be 

entitled ‘‘American Recovery and 

Reinvestment Act—Buy American Act— 

Construction Materials.’’ A reference to 

Subpart 25.6 was added to the ‘‘Scope’’ 

section of Subpart 25.2, Buy American 

Act—Construction Materials. 

Subpart 25.6 includes a policy 

statement at 25.602 that repeats the 

prohibition against using funds 

appropriated by the Recovery Act for 

U.S. construction projects to purchase 

iron, steel, or other manufactured goods 

that were not produced in the U.S. It 

also notes that unmanufactured 

construction materials remain covered 

by the provisions of the Buy American 

Act. The exceptions to this policy (see 

Background section above) are similar to 

those for the Buy American Act, but the 

Recovery Act requires publication in the 

Federal Register of the detailed written 

justification that the agency used to 

make an exception to the statute. The 

Councils welcome comments on 

additional steps that may enhance 

transparency consistent with the goals 

of the Recovery Act. 

In order to enable implementation of 

the policy, the interim rule includes 

definitions of ‘‘steel,’’ ‘‘manufactured 

construction material,’’ 

‘‘unmanufactured construction 

material,’’ ‘‘domestic construction 

material,’’ and ‘‘foreign construction 

material.’’ These definitions are drawn 

from existing Federal domestic-sourcing 

laws and the longstanding 

interpretations that have evolved from 

them. It also includes a cross reference 

to the definition of ‘‘public work’’ at 

FAR 22.401, which defines ‘‘public 

building or public work’’ to mean 

‘‘uilding or work, the construction, 

prosecution, 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.’’ 

Because section 1605 does not specify 

a requirement that significantly all the 

components of construction material 

must also be domestic, as does the Buy 

American Act, the definition of 

domestic construction material under 

this interim rule does not include a 

requirement relating to the origin of the 

components of domestic manufactured 

construction material. Unmanufactured 

construction material is not specifically 

addressed in section 1605 of the 

Recovery Act. However, the Recovery 

Act’s purpose of creating jobs and 

stimulating domestic demand is well 

served by applying the Buy American 

Act to unmanufactured construction 

material. 

The rules for preaward determination 

of the inapplicability of section 1605 

and the Buy American Act are at FAR 

25.604. 

Section 25.605 addresses the 

evaluation of offers containing foreign 

construction material based on an 

approved exception for unreasonable 

cost. If the contracting officer 

determines that an exception based on 

unreasonable cost of domestic 

construction material applies, the 

contracting officer must evaluate the 

offer by adding to the offered price— 

(1) 25 percent of the offered price, if 

foreign iron, steel, or other 

manufactured goods are used as 

construction material based on 

unreasonable cost of comparable 

manufactured domestic construction 

material; and 

(2) 6 percent of the value of foreign 

unmanufactured construction material 

included in the offer based on 

unreasonable cost of comparable 

domestic unmanufactured construction 

material. 

The text of Subpart 25.6 makes it clear 

that a determination to waive the 

applicability of section 1605 should be 

made prior to award. However, section 

25.606 recognizes certain limited 

circumstances in which a postaward 

waiver could be made, but only with 

adequate consideration from the 

contractor. A contractor’s 

noncompliance with section 1605 is 

addressed at FAR 25.607. 

Prescriptions for the use of all of the 

solicitation provisions and contract 

clauses applicable to FAR Part 25 are 


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Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations 14625 

included in a single subpart, 25.11. The 

Councils have modified section 25.1102, 

entitled ‘‘Acquisition of Construction,’’ 

to add a new paragraph that substitutes 

four new provisions and clauses (with 

appropriate alternates), to be used when 

contracting with funds appropriated by 

the Recovery Act, for the four clauses 

otherwise used in construction contracts 

to implement the Buy American Act and 

U.S. obligations under applicable trade 

agreements. Specifically, when using 

Recovery Act appropriated funds, 

contracting officers will use— 

• 52.225–21, Required Use of 

American Iron, Steel, and Manufactured 

Goods—Buy American Act— 

Construction Materials, instead of 

52.225–9, Buy American Act— 

Construction Materials; 

• 52.225–22, Notice of Required Use 

of American Iron, Steel, and Other 

Manufactured Goods—Buy American 

Act—Construction Materials, instead of 

52.225–10, Notice of Buy American Act 

Requirement—Construction Materials; 

• 52.225–23, Required Use of 

American Iron, Steel, and Other 

Manufactured Goods and Buy American 

Act—Construction Materials Under 

Trade Agreements, instead of 52.225– 

11, Buy American Act—Construction 

Materials under Trade Agreements; and 

• 52.225–24, Notice of Required Use 

of American Iron, Steel, and Other 

Manufactured Goods and Buy American 

Act—Construction Materials under 

Trade Agreements, instead of 52.225– 

12, Notice of Buy American Act 

Requirement—Construction Materials 

under Trade Agreements. 

The clauses are unique in that, for 

Recovery Act-funded construction 

projects, the 25 percent price 

adjustment factor for non-U.S. iron, 

steel, and other foreign manufactured 

construction material excepted from the 

section 1605 requirement on the basis of 

unreasonable cost is applied to the 

entire price of the project, not only to 

the cost of the foreign materials. The 6 

percent adjustment for the Buy 

American Act is retained and applied to 

the cost of foreign unmanufactured 

goods excepted from the requirements 

of the Buy American Act on the basis of 

unreasonable cost. Given the 

applicability of the Recovery Act to 

iron, steel, and manufactured goods, the 

definition of ‘‘component’’ is 

unnecessary in these clauses, because 

the definition of domestic construction 

material no longer includes a 

requirement relating to the origin of 

components. 

However, if trade agreements apply to 

the acquisition, the use of the provision 

and clause 52.225–23 and 52.225–24, 

respectively, ensures that eligible 

construction material from designated 

countries is treated in accordance with 

Subpart 25.4. No evaluation factor is 

applied to offers on the basis of using 

eligible construction material. This 

provision and clause retain the same 

basic processes that are used in the 

standard construction clauses, except 

for the specific changes that have been 

addressed relating to new requirements 

of section 1605 of the Recovery Act. 

In the Recovery Act conference report, 

Congress expressed its intent that least 

developed countries be excepted from 

section 1605 and that they retain their 

status as designated countries. However, 

with respect to Caribbean Basin 

countries, Congress did not express a 

similar intent. Therefore, Caribbean 

Basin countries are not included as 

designated countries with respect to the 

Recovery Act. 

C. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold 

Section 4101 of Public Law 103–355, 

the Federal Acquisition Streamlining 

Act (FASA) (41 U.S.C. 429), governs the 

applicability of laws to contracts or 

subcontracts in amounts not greater 

than the simplified acquisition 

threshold. It is intended to limit the 

applicability of laws to them. FASA 

provides that if a provision of law 

contains criminal or civil penalties, or if 

the Federal Acquisition Regulatory 

Council makes a written determination 

that it is not in the best interest of the 

Federal Government to exempt contracts 

or subcontracts at or below the 

simplified acquisition threshold, the 

law will apply to them. 

Therefore, given section 1605 of the 

Recovery Act, which establishes Buy 

American requirements for projects 

funded by the Recovery Act, the FAR 

Council has determined that this rule 

should apply to contracts or 

subcontracts at or below the simplified 

acquisition threshold, as defined at 

2.101. 

This is a significant regulatory action 

and, therefore, was subject to Office of 

Management and Budget (OMB) review 

under Section 6 of Executive Order 

12866, Regulatory Planning and Review, 

dated September 30, 1993. This rule is 

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

D. Regulatory Flexibility Act 

The Councils do not expect this 

interim 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., for the 

following reasons. This interim rule will 

only impact an offeror that wants to use 

non-U.S. iron, steel, and other 

manufactured goods in a construction 

project in the United States. The 

Councils believe that there are adequate 

domestic sources for these materials, 

and the Office of Management and 

Budget (OMB) guidance M–09–10 

issued February 18, 2009, entitled 

‘‘Initial Implementing Guidance for the 

American Recovery and Reinvestment 

Act of 2009,’’ provides a strong 

preference for using small businesses for 

Recovery Act projects wherever 

possible. Therefore, an Initial 

Regulatory Flexibility Analysis has not 

been performed. The Councils will 

consider comments from small entities 

concerning the affected FAR Parts 1, 5, 

25, and 52 in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 601, et seq. (FAC 2005–32, FAR 

case 2009–008), in all correspondence. 

E. Paperwork Reduction Act 

The Paperwork Reduction Act does 

apply; however, these changes to the 

FAR do not impose additional 

information collection requirements to 

the paperwork burden previously 

approved under OMB Control Number 

9000–0141. However, the information 

collection requirements imposed by the 

provisions 52.225–22 and 52.225–24 are 

currently covered by the approved 

information collection requirements for 

provisions 52.225–9 and 52.225–11 

(OMB Control number 9000–0141, 

entitled Buy American Act— 

Construction—FAR Sections Affected: 

Subpart 25.2; 52.225–9; and 52.225–11). 

While the Councils believe no changes 

will be needed to the collection due to 

the interim regulation, comments are 

welcome during the 60 day comment 

period with regard to the data elements, 

the burden, or any other part of the 

collection. 

F. Determination To Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of Defense 

(DoD), the Administrator of General 

Services (GSA), and the Administrator 

of the National Aeronautics and Space 

Administration (NASA) that urgent and 

compelling reasons exist to promulgate 

this interim rule without prior 

opportunity for public comment. This 

action is necessary because the 

American Recovery and Reinvestment 

Act of 2009 became effective upon 

enactment, and contracts using funds 

appropriated by the Recovery Act will 

soon be ready to award. However, 

pursuant to Public Law 98–577 and FAR 

1.501, the Councils will consider public 

comments received in response to this 


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14626 Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations 

interim rule in the formation of the final 

rule. 

List of Subjects in 48 CFR Parts 1, 5, 25, 

and 52 

Government procurement. 

Dated: March 25, 2009. 

Al Matera, 

Director, Office of Acquisition Policy. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 1, 5, 25, and 52 as 

set forth below: 

■ 1. The authority citation for 48 CFR 

parts 1, 5, 25, and 52 continues to read 

as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

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

PART 1—FEDERAL ACQUISITION 

REGULATIONS SYSTEM 

1.106 [Amended] 

■ 2. Amend section 1.106, in the table 

following the introductory paragraph, 

by adding, in numerical sequence, FAR 

segments 52.225–21 and 52.225–23, and 

their corresponding OMB Control 

Number 9000–0141. 

PART 5—PUBLICIZING CONTRACT 

ACTIONS 

■ 3. Amend section 5.207 by revising 

paragraph (c)(13)(iii) to read as follows: 

5.207 Preparation and transmittal of 

synopses. 

* * * * * 

(c) * * * 

(13) * * * 

(iii) If the solicitation will include the 

FAR clause at 52.225–11, Buy American 

Act—Construction Materials under 

Trade Agreements, 52.225–23, Required 

Use of American Iron, Steel, and Other 

Manufactured Goods—Buy American 

Act—Construction Materials under 

Trade Agreements, or an equivalent 

agency clause, insert the following 

notice in the synopsis: ‘‘One or more of 

the items under this acquisition is 

subject to the World Trade Organization 

Government Procurement Agreement 

and Free Trade Agreements.’’ 

* * * * * 

PART 25—FOREIGN ACQUISITION 

■ 4. Amend section 25.001 by revising 

paragraph (c)(1) and adding a new 

paragraph (c)(4) to read as follows: 

25.001 General. 

* * * * * 

(c) * * * 

(1) The Buy American Act uses a twopart test to define a ‘‘domestic end 

product’’ or ‘‘domestic construction 

material’’ (manufactured in the United 

States and a formula based on cost of 

domestic components). The component 

test has been waived for acquisition of 

commercially available off-the-shelf 

items. 

* * * * * 

(4) When using funds appropriated 

under the American Recovery and 

Reinvestment Act of 2009 (Pub. L. 111– 

5), the definition of ‘‘domestic 

manufactured construction material’’ 

requires manufacture in the United 

States but does not include a 

requirement with regard to the origin of 

the components. 

25.002 [Amended] 

■ 5. Amend the table in section 25.002, 

by removing from the sixth row 

‘‘[Reserved]’’ and adding ‘‘American 

Recovery and Reinvestment Act—Buy 

American Act—Construction Materials’’ 

in its place, and in the fifth column 

adding ‘‘X’’. 

■ 6. Add Subpart 25.6 to read as 

follows: 

Subpart 25.6—American Recovery and 

Reinvestment Act—Buy American 

Act—Construction Materials 

Sec. 

25.600 Scope of subpart. 

25.601 Definitions. 

25.602 Policy. 

25.603 Exceptions. 

25.604 Preaward determination concerning 

the inapplicability of section 1605 of the 

Recovery Act or the Buy American Act. 

25.605 Evaluating offers of foreign 

construction material. 

25.606 Postaward determinations. 

25.607 Noncompliance. 

Subpart 25.6—American Recovery and 

Reinvestment Act—Buy American 

Act—Construction Materials 

25.600 Scope of subpart. 

This subpart implements section 1605 

in Division A of the American Recovery 

and Reinvestment Act of 2009 (Pub. L. 

111–5) (Recovery Act) and the Buy 

American Act. It applies to construction 

projects that use funds appropriated or 

otherwise provided by the Recovery 

Act. 

25.601 Definitions. 

As used in this subpart— 

Domestic construction material 

means— 

(1) An unmanufactured construction 

material mined or produced in the 

United States; or 

(2) A construction material 

manufactured in the United States. 

Foreign construction material means a 

construction material other than a 

domestic construction material. 

Manufactured construction material 

means any construction material that is 

not unmanufactured construction 

material. 

Recovery Act designated country 

means a World Trade Organization 

Government Procurement Agreement 

country, a Free Trade Agreement 

country, or a least developed country. 

Steel means an alloy that includes at 

least 50 percent iron, between .02 and 

2 percent carbon, and may include other 

elements. 

Unmanufactured construction 

material means raw material brought to 

the construction site for incorporation 

into the building or work that has not 

been— 

(1) Processed into a specific form and 

shape; or 

(2) Combined with other raw material 

to create a material that has different 

properties than the properties of the 

individual raw materials. 

25.602 Policy. 

Except as provided in 25.603— 

(a) None of the funds appropriated or 

otherwise made available by the 

Recovery Act may be used for a project 

for the construction, alteration, 

maintenance, or repair of a public 

building or public work (as defined at 

22.401) unless— 

(1) The public building or public 

work is located in the United States; and 

(2) All of the iron, steel, and other 

manufactured goods used as 

construction material in the project are 

produced or manufactured in the United 

States. 

(i) Production in the United States of 

the iron or steel used as construction 

material requires that all manufacturing 

processes must take place in the United 

States, except metallurgical processes 

involving refinement of steel additives. 

These requirements do not apply to 

steel or iron used as components or 

subcomponents of other manufactured 

construction material. 

(ii) There is no requirement with 

regard to the origin of components or 

subcomponents in other manufactured 

construction material, as long as the 

manufacture of the construction 

material occurs in the United States. 

(b) Use only domestic 

unmanufactured construction material, 

as required by the Buy American Act. 

25.603 Exceptions. 

(a) When one of the following 

exceptions applies, the contracting 

officer may allow the contractor to 

incorporate foreign construction 

materials without regard to the 

restrictions of section 1605 of the 

Recovery Act or the Buy American Act: 


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Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations 14627 

(1) Nonavailability. The head of the 

contracting activity may determine that 

a particular construction material is not 

mined, produced, or manufactured in 

the United States in sufficient and 

reasonably available commercial 

quantities of a satisfactory quality. The 

determinations of nonavailability of the 

articles listed at 25.104(a) and the 

procedures at 25.103(b)(1) also apply if 

any of those articles are acquired as 

construction materials. 

(2) Unreasonable cost. The 

contracting officer concludes that the 

cost of domestic construction material is 

unreasonable in accordance with 

25.605. 

(3) Inconsistent with public interest. 

The head of the agency may determine 

that application of the restrictions of 

section 1605 of the Recovery Act or the 

Buy American Act to a particular 

construction material would be 

inconsistent with the public interest. 

(b) Determinations. When a 

determination is made, for any of the 

reasons stated in this section, that 

certain foreign construction materials 

may be used— 

(1) The contracting officer shall list 

the excepted materials in the contract; 

and 

(2) The head of the agency shall 

publish a notice in the Federal Register 

within two weeks after the 

determination is made, unless the 

construction material has already been 

determined in the FAR to be 

domestically nonavailable (see list at 

25.104). The notice shall include— 

(i) The title ‘‘Buy American Exception 

under the American Recovery and 

Reinvestment Act of 2009’’; 

(ii) The dollar value and brief 

description of the project; and 

(iii) A detailed justification as to why 

the restriction is being waived. 

(c) Acquisitions under trade 

agreements. (1) For construction 

contracts with an estimated acquisition 

value of $7,443,000 or more, also see 

Subpart 25.4. Offers of products 

determined to be eligible products per 

Subpart 25.4 shall receive equal 

consideration with domestic offers per 

Subpart 25.4. 

(2) For purposes of the Recovery Act, 

designated countries do not include the 

Caribbean Basin Countries. 

25.604 Preaward determination 

concerning the inapplicability of section 

1605 of the Recovery Act or the Buy 

American Act. 

(a) For any acquisition, an offeror may 

request from the contracting officer a 

determination concerning the 

inapplicability of section 1605 of the 

Recovery Act or the Buy American Act 

for specifically identified construction 

materials. The time for submitting the 

request is specified in the solicitation in 

paragraph (b) of either 52.225–22 or 

52.225–24, whichever applies. The 

information and supporting data that 

must be included in the request are also 

specified in the solicitation in 

paragraphs (c) and (d) of either 52.225– 

21 or 52.225–23, whichever applies. 

(b) Before award, the contracting 

officer must evaluate all requests based 

on the information provided and may 

supplement this information with other 

readily available information. 

(c) Determination based on 

unreasonable cost of domestic 

construction material. 

(1) Iron, steel, and other 

manufactured construction material. 

The contracting officer must compare 

the offered price of the contract using 

foreign manufactured construction 

material to the estimated price if all 

domestic manufactured construction 

material were used. If use of domestic 

manufactured construction material 

would increase the overall offered price 

of the contract by more than 25 percent, 

then the contracting officer shall 

determine that the cost of the domestic 

manufactured construction material is 

unreasonable. 

(2) Unmanufactured construction 

material. The contracting officer must 

compare the cost of each foreign 

unmanufactured construction material 

to the cost of domestic unmanufactured 

construction material. If the cost of the 

domestic unmanufactured construction 

material exceeds the cost of the foreign 

unmanufactured construction material 

by more than 6 percent, then the 

contracting officer shall determine that 

the cost of the unmanufactured 

construction material is unreasonable. 

25.605 Evaluating offers of foreign 

construction material. 

(a) If the contracting officer has 

determined that an exception applies 

because the cost of certain domestic 

construction material is unreasonable, 

in accordance with section 25.604, then 

the contracting officer shall apply 

evaluation factors to the offer 

incorporating the use of such foreign 

construction material as follows: 

(1) Use an evaluation factor of 25 

percent, applied to the total offered 

price of the contract, if foreign iron, 

steel, or other manufactured goods are 

incorporated in the offer as construction 

material based on an exception for 

unreasonable cost requested by the 

offeror. 

(2) In addition, use an evaluation 

factor of 6 percent applied to the cost of 

foreign unmanufactured construction 

material incorporated in the offer based 

on an exception for unreasonable cost 

requested by the offeror. 

(3) Total evaluated price = offered 

price + (.25 × offered price, if (a)(1) 

applies) + (.06 × cost of foreign 

unmanufactured construction material, 

if (a)(2) applies). 

(b) If two or more offers are equal in 

price, the contracting officer must give 

preference to an offer that does not 

include foreign construction material 

excepted at the request of the offeror on 

the basis of unreasonable cost. 

(c) Offerors also may submit alternate 

offers based on use of equivalent 

domestic construction material to avoid 

possible rejection of the entire offer if 

the Government determines that an 

exception permitting use of a particular 

foreign construction material does not 

apply. 

(d) If the contracting officer awards a 

contract to an offeror that proposed 

foreign construction material not listed 

in the applicable clause in the 

solicitation (paragraph (b)(3) of 52.225– 

21, or paragraph (b)(3) of 52.225–23), 

the contracting officer must add the 

excepted materials to the list in the 

contract clause. 

25.606 Postaward determinations. 

(a) If a contractor requests a 

determination regarding the 

inapplicability of section 1605 of the 

Recovery Act or the Buy American Act 

after contract award, the contractor must 

explain why it could not request the 

determination before contract award or 

why the need for such determination 

otherwise was not reasonably 

foreseeable. If the contracting officer 

concludes that the contractor should 

have made the request before contract 

award, the contracting officer may deny 

the request. 

(b) The contracting officer must base 

evaluation of any request for a 

determination regarding the 

inapplicability of section 1605 of the 

Recovery Act or the Buy American Act 

made after contract award on 

information required by paragraphs (c) 

and (d) of the applicable clause at 

52.225–21 or 52.225–23 and/or other 

readily available information. 

(c) If a determination, under 

25.603(a), is made after contract award 

that an exception to section 1605 of the 

Recovery Act or to the Buy American 

Act applies, the contracting officer must 

negotiate adequate consideration and 

modify the contract to allow use of the 

foreign construction material. When the 

basis for the exception is the 

unreasonable cost of a domestic 

construction material, adequate 


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consideration is at least the differential 

established in 25.605(a). 

25.607 Noncompliance. 

The contracting officer must— 

(a) Review allegations of violations of 

section 1605 of the Recovery Act or Buy 

American Act; 

(b) Unless fraud is suspected, notify 

the contractor of the apparent 

unauthorized use of foreign 

construction material and request a 

reply, to include proposed corrective 

action; and 

(c) If the review reveals that a 

contractor or subcontractor has used 

foreign construction material without 

authorization, take appropriate action, 

including one or more of the following: 

(1) Process a determination 

concerning the inapplicability of section 

1605 of the Recovery Act or the Buy 

American Act in accordance with 

25.606. 

(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. A determination to retain 

foreign construction material does not 

constitute a determination that an 

exception to section 1605 of the 

Recovery Act or the Buy American Act 

applies, and this should be stated in the 

determination. Further, a determination 

to retain foreign construction material 

does not affect the Government’s right to 

suspend or debar a contractor, 

subcontractor, or supplier for violation 

of section 1605 of the Recovery Act or 

the Buy American Act, or to exercise 

other contractual rights and remedies, 

such as reducing the contract price or 

terminating the contract for default. 

(4) If the noncompliance is 

sufficiently serious, consider exercising 

appropriate contractual remedies, such 

as terminating the contract for default. 

Also consider preparing and forwarding 

a report to the agency suspension or 

debarment official in accordance with 

Subpart 9.4. If the noncompliance 

appears to be fraudulent, refer the 

matter to other appropriate agency 

officials, such as the officer responsible 

for criminal investigation. 

■ 7. Amend section 25.1102 by adding 

an introductory paragraph; revising 

paragraph (c)(1); and adding paragraph 

(e) to read as follows: 

25.1102 Acquisition of construction. 

When using funds other than those 

appropriated under the American 

Recovery and Reinvestment Act of 2009 

(Pub. L. 111–5) (Recovery Act), follow 

the prescriptions in paragraphs (a) 

through (d) of this section. Otherwise, 

follow the prescription in paragraph (e). 

* * * * * 

(c) * * * 

(1) List in paragraph (b)(3) of the 

clause all foreign construction material 

excepted from the requirements of the 

Buy American Act, other than 

designated country construction 

material. 

* * * * * 

(e)(1) When using funds appropriated 

under the Recovery Act for 

construction, use provisions and clauses 

52.225–21, 52.225–22, 52.225–23, or 

52.225–24 (with appropriate Alternates) 

in lieu of the provisions and clauses 

52.225–9, 52.225–10, 52.225–11, or 

52.225–12 (with appropriate Alternates), 

respectively, that would be applicable 

as prescribed in paragraphs (a) through 

(d) of this section if Recovery Act funds 

were not used. 

(2) When using clause 52.225–23, list 

foreign construction material in 

paragraph (b)(3) of the clause as follows: 

(i) Basic clause. List all foreign 

construction material excepted from the 

requirements of the Buy American Act, 

other than Recovery Act designated 

country construction material. 

(ii) Alternate I—List in paragraph 

(b)(3) of the clause all foreign 

construction material excepted from the 

requirements of the Buy American Act, 

unless the excepted foreign construction 

material is from a Recovery Act 

designated country other than Bahrain, 

Mexico, or Oman. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 8. Add section 52.225–21 through 

52.225–24 to read as follows: 

52.225–21 Required Use of American Iron, 

Steel, and Other Manufactured Goods—Buy 

American Act—Construction Materials. 

As prescribed in 25.1102(e), insert the 

following clause: 

Required Use of American Iron, Steel, 

and Manufactured Goods-Buy 

American Act—Construction Materials 

MAR 2009) 

(a) Definitions. As used in this 

clause— 

Construction material means an 

article, material, or supply brought to 

the construction site by the Contractor 

or a subcontractor for incorporation into 

the building or work. The term also 

includes an item brought to the site 

preassembled from articles, materials, or 

supplies. However, emergency life 

safety systems, such as emergency 

lighting, fire alarm, and audio 

evacuation systems, that are discrete 

systems incorporated into a public 

building or work and that are produced 

as complete systems, are evaluated as a 

single and distinct construction material 

regardless of when or how the 

individual parts or components of those 

systems are delivered to the 

construction site. Materials purchased 

directly by the Government are 

supplies, not construction material. 

Domestic construction material 

means— 

(1) An unmanufactured construction 

material mined or produced in the 

United States; or 

(2) A construction material 

manufactured in the United States. 

Foreign construction material means a 

construction material other than a 

domestic construction material. 

Manufactured construction material 

means any construction material that is 

not unmanufactured construction 

material. 

Steel means an alloy that includes at 

least 50 percent iron, between .02 and 

2 percent carbon, and may include other 

elements. 

United States means the 50 States, the 

District of Columbia, and outlying areas. 

Unmanufactured construction 

material means raw material brought to 

the construction site for incorporation 

into the building or work that has not 

been— 

(1) Processed into a specific form and 

shape; or 

(2) Combined with other raw material 

to create a material that has different 

properties than the properties of the 

individual raw materials. 

(b) Domestic preference. (1) This 

clause implements— 

(i) Section 1605 of the American 

Recovery and Reinvestment Act of 2009 

(Recovery Act) (Pub. L. 111–5), by 

requiring, unless an exception applies, 

that all iron, steel, and other 

manufactured goods used as 

construction material in the project are 

produced in the United States; and 

(ii) The Buy American Act (41 U.S.C. 

10a–10d) by providing a preference for 

unmanufactured domestic construction 

material. 

(2) The Contractor shall use only 

domestic construction material in 

performing this contract, except as 

provided in paragraph (b)(3) and (b)(4) 

of this clause. 

(3) This requirement does not apply to 

the construction material or components 

listed by the Government as follows: 


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lllllllllllllllllll

[Contracting Officer to list applicable 

excepted materials or indicate ‘‘none’’] 

(4) The Contracting Officer may add 

other foreign construction material to 

the list in paragraph (b)(3) of this clause 

if the Government determines that— 

(i) The cost of domestic construction 

material would be unreasonable. 

(A) The cost of domestic iron, steel, or 

other manufactured goods used as 

construction material is unreasonable 

when the cumulative cost of such 

material will increase the cost of the 

contract by more than 25 percent; 

(B) The cost of unmanufactured 

construction material is unreasonable 

when the cost of such material exceeds 

the cost of foreign material by more than 

6 percent; 

(ii) The construction material is not 

mined, produced, or manufactured in 

the United States in sufficient and 

reasonably available quantities and of a 

satisfactory quality; or 

(iii) The application of the restriction 

of section 1605 of the Recovery Act or 

the Buy American Act to a particular 

construction material would be 

inconsistent with the public interest. 

(c) Request for determination of 

inapplicability of Section 1605 of the 

Recovery Act or the Buy American Act. 

(1)(i) Any Contractor request to use 

foreign construction material in 

accordance with paragraph (b)(4) of this 

clause shall include adequate 

information for Government evaluation 

of the request, including— 

(A) A description of the foreign and 

domestic construction materials; 

(B) Unit of measure; 

(C) Quantity; 

(D) Cost; 

(E) Time of delivery or availability; 

(F) Location of the construction 

project; 

(G) Name and address of the proposed 

supplier; and 

(H) A detailed justification of the 

reason for use of foreign construction 

materials cited in accordance with 

paragraph (b)(4) of this clause. 

(ii) A request based on unreasonable 

cost shall include a reasonable survey of 

the market and a completed cost 

comparison table in the format in 

paragraph (d) of this clause. 

(iii) The cost of construction material 

shall include all delivery costs to the 

construction site and any applicable 

duty. 

(iv) Any Contractor request for a 

determination submitted after contract 

award shall explain why the Contractor 

could not reasonably foresee the need 

for such determination and could not 

have requested the determination before 

contract award. If the Contractor does 

not submit a satisfactory explanation, 

the Contracting Officer need not make a 

determination. 

(2) If the Government determines after 

contract award that an exception to 

section 1605 of the Recovery Act or the 

Buy American Act applies and the 

Contracting Officer and the Contractor 

negotiate adequate consideration, the 

Contracting Officer will modify the 

contract to allow use of the foreign 

construction material. However, when 

the basis for the exception is the 

unreasonable cost of a domestic 

construction material, adequate 

consideration is not less than the 

differential established in paragraph 

(b)(4)(i) of this clause. 

(3) Unless the Government determines 

that an exception to section 1605 of the 

Recovery Act or the Buy American Act 

applies, use of foreign construction 

material is noncompliant with section 

1605 of the American Recovery and 

Reinvestment Act or the Buy American 

Act. 

(d) Data. To permit evaluation of 

requests under paragraph (c) of this 

clause based on unreasonable cost, the 

Contractor shall include the following 

information and any applicable 

supporting data based on the survey of 

suppliers: 

FOREIGN AND DOMESTIC CONSTRUCTION MATERIALS COST COMPARISON

Construction material description Unit of measure Quantity Cost 

(dollars) * 

Item 1: 

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

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

Item 2 

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

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

[List name, address, telephone number, and contact for suppliers surveyed. Attach copy of reponse; if oral, attach summary.] [Include other 

applicable supportinginformation.] 

*Include all delivery costs to the construction site.] 

(End of clause) 

52.225–22 Notice of Required Use of 

American Iron, Steel, and Other 

Manufactured Goods—Buy American Act— 

Construction Materials. 

As prescribed in 25.1102(e), insert the 

following provision: 

NOTICE OF REQUIRED USE OF 

AMERICAN IRON, STEEL, AND 

OTHER MANUFACTURED GOODS— 

BUY AMERICAN ACT— 

CONSTRUCTION MATERIALS (MAR 

2009) 

(a) Definitions. ‘‘Construction 

material,’’ ‘‘domestic construction 

material,’’ ‘‘foreign construction 

material,’’ ‘‘manufactured construction 

material,’’ ‘‘steel,’’ and 

‘‘unmanufactured construction 

material,’’ as used in this provision, are 

defined in the clause of this solicitation 

entitled ‘‘Required Use of Iron, Steel, 

and Other Manufactured Goods—Buy 

American Act—Construction Materials’’ 

(Federal Acquisition Regulation (FAR) 

clause 52.225–21). 

(b) Requests for determinations of 

inapplicability. An offeror requesting a 

determination regarding the 

inapplicability of section 1605 of the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5) (Recovery 

Act) or the Buy American Act should 

submit the request to the Contracting 

Officer in time to allow a determination 

before submission of offers. The offeror 

shall include the information and 

applicable supporting data required by 

paragraphs (c) and (d) of the clause at 

FAR 52.225–21 in the request. If an 

offeror has not requested a 

determination regarding the 

inapplicability of 1605 of the Recovery 

Act or the Buy American Act before 

submitting its offer, or has not received 

a response to a previous request, the 

offeror shall include the information 

and supporting data in the offer. 

(c) Evaluation of offers. (1) If the 

Government determines that an 

exception based on unreasonable cost of 

domestic construction material applies, 

the Government will evaluate an offer 


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requesting exception to the 

requirements of section 1605 of the 

Recovery Act or the Buy American Act 

by adding to the offered price of the 

contract— 

(i) 25 percent of the offered price of 

the contract, if foreign iron, steel, or 

other manufactured goods are used as 

construction material based on 

unreasonable cost of comparable 

manufactured domestic construction 

material; and 

(ii) 6 percent of the cost of foreign 

unmanufactured construction material 

included in the offer based on 

unreasonable cost of comparable 

domestic unmanufactured construction 

material. 

(2) If two or more offers are equal in 

price, the Contracting Officer will give 

preference to an offer that does not 

include foreign construction material 

excepted at the request of the offeror on 

the basis of unreasonable cost. 

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

includes foreign construction material 

not listed by the Government in this 

solicitation in paragraph (b)(2) of the 

clause at FAR 52.225–21, the offeror 

also may submit an alternate offer based 

on use of equivalent domestic 

construction material. 

(2) If an alternate offer is submitted, 

the offeror shall submit a separate 

Standard Form 1442 for the alternate 

offer and a separate cost comparison 

table prepared in accordance with 

paragraphs (c) and (d) of the clause at 

FAR 52.225–21 for the offer that is 

based on the use of any foreign 

construction material for which the 

Government has not yet determined an 

exception applies. 

(3) If the Government determines that 

a particular exception requested in 

accordance with paragraph (c) of the 

clause at FAR 52.225–21 does not apply, 

the Government will evaluate only those 

offers based on use of the equivalent 

domestic construction material, and the 

offeror shall be required to furnish such 

domestic construction material. An offer 

based on use of the foreign construction 

material for which an exception was 

requested— 

(i) Will be rejected as nonresponsive 

if this acquisition is conducted by 

sealed bidding; or 

(ii) May be accepted if revised during 

negotiations. 

(End of provision) 

Alternate I (MAR 2009]). As 

prescribed in 25.1102(e), substitute the 

following paragraph (b) for paragraph 

(b) of the basic provision: 

(b) Requests for determinations of 

inapplicability. An offeror requesting a 

determination regarding the 

inapplicability of section 1605 of the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5) (Recovery 

Act) or the Buy American Act shall 

submit the request with its offer, 

including the information and 

applicable supporting data required by 

paragraphs (c) and (d) of the clause at 

FAR 52.225–21. 

52.225–23 Required Use of American Iron, 

Steel, and Other Manufactured Goods—Buy 

American Act—Construction Materials 

under Trade Agreements. 

As prescribed in 25.1102(e), insert the 

following clause: 

Required Use of American Iron, Steel, 

and Other Manufactured Goods—Buy 

American Act—Construction Materials 

Under Trade Agreements MAR 2009) 

(a) Definitions. As used in this 

clause— 

Construction material means an 

article, material, or supply brought to 

the construction site by the Contractor 

or subcontractor for incorporation into 

the building or work. The term also 

includes an item brought to the site 

preassembled from articles, materials, or 

supplies. However, emergency life 

safety systems, such as emergency 

lighting, fire alarm, and audio 

evacuation systems, that are discrete 

systems incorporated into a public 

building or work and that are produced 

as complete systems, are evaluated as a 

single and distinct construction material 

regardless of when or how the 

individual parts or components of those 

systems are delivered to the 

construction site. Materials purchased 

directly by the Government are 

supplies, not construction material. 

Domestic construction material 

means— (1) An unmanufactured 

construction material mined or 

produced in the United States; or 

(2) A construction material 

manufactured in the United States. 

Foreign construction material means a 

construction material other than a 

domestic construction material. 

Free trade agreement (FTA) country 

construction material means a 

construction material that— 

(1) Is wholly the growth, product, or 

manufacture of an FTA country; or 

(2) In the case of a construction 

material that consists in whole or in part 

of materials from another country, has 

been substantially transformed in an 

FTA country into a new and different 

construction material distinct from the 

materials from which it was 

transformed. 

Least developed country construction 

material means a construction material 

that— 

(1) Is wholly the growth, product, or 

manufacture of a least developed 

country; or 

(2) In the case of a construction 

material that consists in whole or in part 

of materials from another country, has 

been substantially transformed in a least 

developed country into a new and 

different construction material distinct 

from the materials from which it was 

transformed. 

Manufactured construction material 

means any construction material that is 

not unmanufactured construction 

material. 

Recovery Act designated country 

means any of the following countries: 

(1) A World Trade Organization 

Government Procurement Agreement 

(WTO GPA) country (Aruba, Austria, 

Belgium, Bulgaria, Canada, Cyprus, 

Czech Republic, Denmark, Estonia, 

Finland, France, Germany, Greece, Hong 

Kong, Hungary, Iceland, Ireland, Israel, 

Italy, Japan, Korea (Republic of), Latvia, 

Liechtenstein, Lithuania, Luxembourg, 

Malta, Netherlands, Norway, Poland, 

Portugal, Romania, Singapore, Slovak 

Republic, Slovenia, Spain, Sweden, 

Switzerland, or United Kingdom); 

(2) A Free Trade Agreement country 

(FTA)(Australia, Bahrain, Canada, Chile, 

Costa Rica, Dominican Republic, El 

Salvador, Guatemala, Honduras, Israel, 

Mexico, Morocco, Nicaragua, Oman, 

Peru, or Singapore); or 

(3) A least developed country 

(Afghanistan, Angola, Bangladesh, 

Benin, Bhutan, Burkina Faso, Burundi, 

Cambodia, Central African Republic, 

Chad, Comoros, Democratic Republic of 

Congo, Djibouti, East Timor, Equatorial 

Guinea, Eritrea, Ethiopia, Gambia, 

Guinea, Guinea-Bissau, Haiti, Kiribati, 

Laos, Lesotho, Liberia, Madagascar, 

Malawi, Maldives, Mali, Mauritania, 

Mozambique, Nepal, Niger, Rwanda, 

Samoa, Sao Tome and Principe, 

Senegal, Sierra Leone, Solomon Islands, 

Somalia, Tanzania, Togo, Tuvalu, 

Uganda, Vanuatu, Yemen, or Zambia). 

Recovery Act designated country 

construction material means a 

construction material that is a WTO 

GPA country construction material, an 

FTA country construction material, or a 

least developed country construction 

material. 

Steel means an alloy that includes at 

least 50 percent iron, between .02 and 

2 percent carbon, and may include other 

elements. 

United States means the 50 States, the 

District of Columbia, and outlying areas. 

Unmanufactured construction 

material means raw material brought to 

the construction site for incorporation 

into the building or work that has not 

been— 


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(1) Processed into a specific form and 

shape; or 

(2) Combined with other raw material 

to create a material that has different 

properties than the properties of the 

individual raw materials. 

WTO GPA country construction 

material means a construction material 

that— 

(1) Is wholly the growth, product, or 

manufacture of a WTO GPA country; or 

(2) In the case of a construction 

material that consists in whole or in part 

of materials from another country, has 

been substantially transformed in a 

WTO GPA country into a new and 

different construction material distinct 

from the materials from which it was 

transformed. 

(b) Construction materials. (1) The 

restrictions of section 1605 of the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5) (Recovery 

Act) and the Buy American Act (41 

U.S.C. 10a–10d) do not apply to 

Recovery Act designated country 

construction material. Consistent with 

U.S. obligations under international 

agreements, this clause implements— 

(i) Section 1605 of the Recovery Act 

by requiring, unless an exception 

applies, that all iron, steel, and other 

manufactured goods used as 

construction material in the project are 

produced in the United States; and 

(ii) The Buy American Act by 

providing a preference for 

unmanufactured domestic construction 

material. 

(2) The Contractor shall use only 

domestic or Recovery Act designated 

country construction material in 

performing this contract, except as 

provided in paragraphs (b)(3) and (b)(4) 

of this clause. 

(3) The requirement in paragraph 

(b)(2) of this clause does not apply to 

the construction materials or 

components listed by the Government 

as follows: 

lllllllllllllllllll

[Contracting Officer to list applicable 

excepted materials or indicate ‘‘none’’.] 

(4) The Contracting Officer may add 

other construction material to the list in 

paragraph (b)(3) of this clause if the 

Government determines that— 

(i) The cost of domestic construction 

material would be unreasonable. 

(A) The cost of domestic iron, steel, or 

other manufactured goods used as 

construction material is unreasonable 

when the cumulative cost of such 

material will increase the overall cost of 

the contract by more than 25 percent; 

(B) The cost of unmanufactured 

construction material is unreasonable 

when the cost of such material exceeds 

the cost of foreign material by more than 

6 percent; 

(ii) The construction material is not 

mined, produced, or manufactured in 

the United States in sufficient and 

reasonably available commercial 

quantities of a satisfactory quality; or 

(iii) The application of the restriction 

of section 1605 of the Recovery Act or 

the Buy American Act to a particular 

construction material would be 

inconsistent with the public interest. 

(c) Request for determination of 

inapplicability of section 1605 of the 

Recovery Act or the Buy American Act. 

(1)(i) Any Contractor request to use 

foreign construction material in 

accordance with paragraph (b)(4) of this 

clause shall include adequate 

information for Government evaluation 

of the request, including— 

(A) A description of the foreign and 

domestic construction materials; 

(B) Unit of measure; 

(C) Quantity; 

(D) Cost; 

(E) Time of delivery or availability; 

(F) Location of the construction 

project; 

(G) Name and address of the proposed 

supplier; and 

(H) A detailed justification of the 

reason for use of foreign construction 

materials cited in accordance with 

paragraph (b)(4) of this clause. 

(ii) A request based on unreasonable 

cost shall include a reasonable survey of 

the market and a completed cost 

comparison table in the format in 

paragraph (d) of this clause. 

(iii) The cost of construction material 

shall include all delivery costs to the 

construction site and any applicable 

duty. 

(iv) Any Contractor request for a 

determination submitted after contract 

award shall explain why the Contractor 

could not reasonably foresee the need 

for such determination and could not 

have requested the determination before 

contract award. If the Contractor does 

not submit a satisfactory explanation, 

the Contracting Officer need not make a 

determination. 

(2) If the Government determines after 

contract award that an exception to 

section 1605 of the Recovery Act or the 

Buy American Act applies and the 

Contracting Officer and the Contractor 

negotiate adequate consideration, the 

Contracting Officer will modify the 

contract to allow use of the foreign 

construction material. However, when 

the basis for the exception is the 

unreasonable cost of a domestic 

construction material, adequate 

consideration is not less than the 

differential established in paragraph 

(b)(4)(i) of this clause. 

(3) Unless the Government determines 

that an exception to the section 1605 of 

the Recovery Act or the Buy American 

Act applies, use of foreign construction 

material other than that covered by 

trade agreements is noncompliant with 

the applicable Act. 

(d) Data. To permit evaluation of 

requests under paragraph (c) of this 

clause based on unreasonable cost, the 

Contractor shall include the following 

information and any applicable 

supporting data based on the survey of 

suppliers: 

FOREIGN AND DOMESTIC CONSTRUCTION MATERIALS COST COMPARISON

Construction material description Unit of measure Quantity Cost (dollars)* 

Item 1: 

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

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

Item 2: 

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

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

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

applicable supporting information.] 

[* Include all delivery costs to the construction site.] 

(End of clause) Alternate I (MAR 2009). As prescribed 

in 25.1102(e), add the following 

definition of ‘‘Bahrainian, Mexican, or 

Omani construction material’’ to 


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14632 Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations 

paragraph (a) of the basic clause, and 

substitute the following paragraphs 

(b)(1) and (b)(2) for paragraphs (b)(1) 

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

Bahrainian, Mexican, or Omani 

construction material’’ means a 

construction material that— 

(1) Is wholly the growth, product, or 

manufacture of Bahrain, Mexico, or 

Oman; or 

(2) In the case of a construction 

material that consists in whole or in part 

of materials from another country, has 

been substantially transformed in 

Bahrain, Mexico, or Oman into a new 

and different construction material 

distinct from the materials from which 

it was transformed. 

(b) Construction materials. (1) The 

restrictions of section 1605 of the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5) (Recovery 

Act) and the Buy American Act do not 

apply to Recovery Act designated 

country construction material. 

Consistent with U.S. obligations under 

international agreements, this clause 

implements— 

(i) Section 1605 of the Recovery Act, 

by requiring, unless an exception 

applies, that all iron, steel, and other 

manufactured goods used as 

construction material in the project are 

produced in the United States; and 

(ii) The Buy American Act providing 

a preference for unmanufactured 

domestic construction material. 

(2) The Contractor shall use only 

domestic or Recovery Act designated 

country construction material other than 

Bahrainian, Mexican, or Omani 

construction material in performing this 

contract, except as provided in 

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

clause. 

52.225–24 Notice of Required Use of 

American Iron, Steel, and Other 

Manufactured Goods—Buy American Act— 

Construction Materials under Trade 

Agreements. 

As prescribed in 25.1102(e), insert the 

following provision: 

Notice of Required Use Of American 

Iron, Steel, and Other Manufactured 

Goods—Buy American Act— 

Construction Materials Under Trade 

Agreements (MAR 2009) 

(a) Definitions. ‘‘Construction 

material,’’ ‘‘domestic construction 

material,’’ ‘‘foreign construction 

material,’’ ‘‘manufactured construction 

material,’’ ‘‘Recovery Act designated 

country construction material,’’ ‘‘steel,’’ 

and ‘‘unmanufactured construction 

material,’’ as used in this provision, are 

defined in the clause of this solicitation 

entitled ‘‘Required Use of Iron, Steel, 

and Other Manufactured Goods—Buy 

American Act—Construction Materials 

Under Trade Agreements’’ (Federal 

Acquisition Regulation (FAR) clause 

52.225–23). 

(b) Requests for determination of 

inapplicability. An offeror requesting a 

determination regarding the 

inapplicability of section 1605 of the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5) (Recovery 

Act) or the Buy American Act should 

submit the request to the Contracting 

Officer in time to allow a determination 

before submission of offers. The offeror 

shall include the information and 

applicable supporting data required by 

paragraphs (c) and (d) of FAR clause 

52.225–23 in the request. If an offeror 

has not requested a determination 

regarding the inapplicability of section 

1605 of the Recovery Act or the Buy 

American Act before submitting its 

offer, or has not received a response to 

a previous request, the offeror shall 

include the information and supporting 

data in the offer. 

(c) Evaluation of offers. (1) If the 

Government determines that an 

exception based on unreasonable cost of 

domestic construction material applies, 

the Government will evaluate an offer 

requesting exception to the 

requirements of section 1605 of the 

Recovery Act or the Buy American Act 

by adding to the offered price of the 

contract— 

(i) 25 percent of the offered price of 

the contract, if foreign iron, steel, or 

other manufactured goods are used as 

construction material based on 

unreasonable cost of comparable 

manufactured domestic construction 

material; and 

(ii) 6 percent of the cost of foreign 

unmanufactured construction material 

included in the offer based on 

unreasonable cost of comparable 

domestic unmanufactured construction 

material. 

(2) If two or more offers are equal in 

price, the Contracting Officer will give 

preference to an offer that does not 

include foreign construction material 

excepted at the request of the offeror on 

the basis of unreasonable cost. 

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

includes foreign construction material, 

other than Recovery Act designated 

country construction material, that is 

not listed by the Government in this 

solicitation in paragraph (b)(3) of FAR 

clause 52.225–23, the offeror also may 

submit an alternate offer based on use 

of equivalent domestic or Recovery Act 

designated country construction 

material. 

(2) If an alternate offer is submitted, 

the offeror shall submit a separate 

Standard Form 1442 for the alternate 

offer and a separate cost comparison 

table prepared in accordance with 

paragraphs (c) and (d) of FAR clause 

52.225–23 for the offer that is based on 

the use of any foreign construction 

material for which the Government has 

not yet determined an exception 

applies. 

(3) If the Government determines that 

a particular exception requested in 

accordance with paragraph (c) of FAR 

clause 52.225–23 does not apply, the 

Government will evaluate only those 

offers based on use of the equivalent 

domestic or Recovery Act designated 

country construction material, and the 

offeror shall be required to furnish such 

domestic or Recovery Act designated 

country construction material. An offer 

based on use of the foreign construction 

material for which an exception was 

requested— 

(i) Will be rejected as nonresponsive 

if this acquisition is conducted by 

sealed bidding; or 

(ii) May be accepted if revised during 

negotiations. 

(End of provision) 

Alternate I (MAR 2009). As prescribed 

in 25.1102(e), substitute the following 

paragraph (b) for paragraph (b) of the 

basic provision: 

(b) Requests for determination of 

inapplicability. An offeror requesting a 

determination regarding the 

inapplicability of section 1605 of the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5) (Recovery 

Act) or the Buy American Act shall 

submit the request with its offer, 

including the information and 

applicable supporting data required by 

paragraphs (c) and (d) of FAR clause 

52.225–23. 

Alternate II (MAR 2009). As 

prescribed in 25.1102(e), add the 

definition of ‘‘Bahrainian, Mexican, or 

Omani construction material’’ to 

paragraph (a) and substitute the 

following paragraph (d) for paragraph 

(d) of the basic provision: 

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

includes foreign construction material, 

except foreign construction material 

from a Recovery Act designated country 

other than Bahrain, Mexico, or Oman 

that is not listed by the Government in 

this solicitation in paragraph (b)(3) of 

FAR clause 52.225–23, the offeror also 

may submit an alternate offer based on 

use of equivalent domestic or Recovery 

Act designated country construction 

material other than Bahrainian, 

Mexican, or Omani construction 

material. 

(2) If an alternate offer is submitted, 

the offeror shall submit a separate 

Standard Form 1442 for the alternate 


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Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations 14633 

offer and a separate cost comparison 

table prepared in accordance with 

paragraphs (c) and (d) of FAR clause 

52.225–23 for the offer that is based on 

the use of any foreign construction 

material for which the Government has 

not yet determined an exception 

applies. 

(3) If the Government determines that 

a particular exception requested in 

accordance with paragraph (c) of FAR 

clause 52.225–23 does not apply, the 

Government will evaluate only those 

offers based on use of the equivalent 

domestic or Recovery Act designated 

country construction material other than 

Bahrainian, Mexican, or Omani 

construction material. An offer based on 

use of the foreign construction material 

for which an exception was requested— 

(i) Will be rejected as nonresponsive 

if this acquisition is conducted by 

sealed bidding; or 

(ii) May be accepted if revised during 

negotiations. 

[FR Doc. E9–7031 Filed 3–30–09; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 3 and 52 

[FAC 2005–32; FAR Case 2009–012; Item 

II; Docket 2009–0009, Sequence 1] 

RIN 9000–AL19 

Federal Acquisition Regulation; FAR 

Case 2009–012, American Recovery 

and Reinvestment Act of 2009 (the 

Recovery Act)—Whistleblower 

Protections 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on an interim 

rule amending the Federal Acquisition 

Regulation (FAR) to implement the 

American Recovery and Reinvestment 

Act of 2009 (the Recovery Act) with 

respect to section 1553 of Division A, 

Protecting State and Local Government 

and Contractor Whistleblowers. This 

rule prohibits non-Federal employers 

from discharging, demoting, or 

discriminating against an employee as a 

reprisal for disclosing information. 

DATES: Effective Date: March 31, 2009. 

Applicability Date: The rule applies to 

solicitations issued and contracts 

awarded on or after the effective date of 

this rule. Contracting officers shall 

modify, on a bilateral basis, in 

accordance with FAR 1.108(d)(3), 

existing contracts to include the FAR 

clause for future orders, if the Recovery 

Act funds will be used. In the event that 

a contractor refuses to accept such a 

modification, the contractor will not be 

eligible for receipt of the Recovery Act 

funds. 

Comment Date: Interested parties 

should submit written comments to the 

FAR Secretariat on or before June 1, 

2009 to be considered in the 

formulation of a final rule. 

ADDRESSES: Submit comments 

identified by FAC 2005–32, FAR case 

2009–012, by any of the following 

methods: 

• Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting ‘‘FAR 

Case 2009–012’’ under the heading 

‘‘Comment or Submission’’. Select the 

link ‘‘Send a Comment or Submission’’ 

that corresponds with FAR Case 2009– 

012. Follow the instructions provided to 

complete the ‘‘Public Comment and 

Submission Form’’. Please include your 

name, company name (if any), and 

‘‘FAR Case 2009–012’’ on your attached 

document. 

• Fax: 202–501–4067. 

• Mail: General Services 

Administration, FAR Secretariat (VPR), 

1800 F Street, NW., Room 4041, ATTN: 

Hada Flowers, Washington, DC 20405. 

Instructions: Please submit comments 

only and cite FAC 2005–32, FAR case 

2009–012, 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. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Ms. 

Jeritta Parnell, Procurement Analyst, at 

(202) 501–4082. For information 

pertaining to status or publication 

schedules, contact the FAR Secretariat 

at (202) 501–4755. Please cite FAC 

2005–32, FAR case 2009–012. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This interim rule implements section 

1553 of the American Recovery and 

Reinvestment Act of 2009 (the Recovery 

Act) with respect to the protection of 

whistleblowers, by adding a new section 

3.907, Whistleblower Protections Under 

the American Recovery and 

Reinvestment Act of 2009 and a new 

clause at FAR 52.203–15, Whistleblower 

Protections Under the American 

Recovery and Reinvestment Act of 2009, 

and its prescription in FAR 3.907–7. 

On February 17, 2009, the President 

signed Public Law 111–5, the American 

Recovery and Reinvestment Act of 2009, 

including a number of provisions to be 

implemented in Federal Government 

contracts. Among these provisions is 

Section 1553 of the Recovery Act, 

‘‘Protecting State and Local Government 

and Contractor Whistleblowers’’. This 

requirement promotes transparency in 

Federal contracting. 

B. Discussion 

FAR 3.907 provides that non-Federal 

employers receiving funds under the 

Recovery Act are prohibited from 

discharging, demoting, or 

discriminating against employees as a 

reprisal for disclosing certain covered 

information to certain categories of 

Government officials or a person with 

supervisory authority over the 

employee. This section further provides 

definitions relevant to the statute; 

establishes time periods within which 

the Inspector General and the agency 

head must take action with regard to a 

complaint filed by a contractor 

employee; establishes procedures for 

access to investigative files of the 

Inspector General; and provides for 

remedies and enforcement authority. 

FAR 3.907–7 prescribes a new clause at 

52.203–15. 

C. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold 

Section 4101 of Public Law 103–355, 

the Federal Acquisition Streamlining 

Act (FASA) (41 U.S.C. 429), governs the 

applicability of laws to contracts or 

subcontracts in amounts not greater 

than the simplified acquisition 

threshold. It is intended to limit the 

applicability of laws to them. The FASA 

provides that if a provision of law 

contains criminal or civil penalties, or if 

the Federal Acquisition Regulatory 

Council (FAR Council) makes a written 

determination that it is not in the best 

interest of the Federal Government to 

exempt contracts or subcontracts at or 

below the simplified acquisition 

threshold, the law will apply to them. 

Therefore, given section 1553 of the 

Recovery Act, which extends 

whistleblower protections to employees 

of contractors that receive contracts 

funded under the Recovery Act, and the 

initial implementing guidance for the 

Recovery Act issued on February 18, 


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