Red Line Content: Procurement Guidance:
T3.6.4 Foreign Acquisition (Revision 6, October 2007)
Foreign Acquisition
Section 1 : Buy American Act--Supplies

a.  FAA is subject to the Buy American Act in its acquisition ofwhen acquiring supplies, services involving supplies, and construction, alteration or repair in the United States.  With Thelimited exceptions, the Buy American Act expresses a strong preference for the acquisition ofacquiring only domestic end products, with limited exceptions.  The Buy American Act uses a two-part test to define a domestic end product:

(1)  The article must be manufactured in the United States; and

(2)  The cost of domestic components must exceed 50 percent of the cost of all the components.   

b.  Exceptions.   When one of the following exceptions applies, the FAA may acquire a foreign end product without regard to the restrictions of the Buy American Act restrictions:

(1)   A supply purchase of $3,000 or less; 

(2)   The Administrator, in a written, nondelegable determination, states that preference for a domestic end item(s) is not in the public interest; or

(3)   The Contracting Officer (CO) determines that articles, materials, and supplies are:

(a)   For use outside of the U.S.;

(b)   Unreasonable in terms of cost (see subsection d., below); or 

(c)   End items or components not mined, produced, or manufactured in the U.S. in sufficient and reasonably available commercial quantities and of a satisfactory quality.  When a competitive acquisition results in no offers of domestic end products, the end products can be considered unavailable in the U.S..  The articles listed in subparagraph e. below are considered unavailable domestically.; or

(4)   The purchase is for commercial information resources (AMS Policy Appendix C defines commercial item and AMS Procurement Guidance T3.2.1 A.3.b. defines information resources).

c.  Documentation.   The CO must document any exception to the Buy American Act.

d.  Determining Reasonableness of Cost.  

(1)  This subsection applies to all acquisitionsacquisition of articles, materials, and supplies not covered by the below paragraph e. "Excepted Articles, Materials, and Supplies" below."   If  an offer for a domestic end product is not the low offer, and an offer for a foreign end product is the low offer, the CO must determine the reasonableness of the cost of the domestic offer by adding to the cost of the low foreign offer, inclusive of duty, evaluation percentages as follows: 

(a)  6 percent, if the lowest domestic offer is from a large business concern; or

(b) 12 percent, if the lowest domestic offer is from a small business concern.  The CO must use this factor in small business set-asides if the low offer is from a small business concern not offering a domestic end product.  

The increased percentage is for evaluation purposes only in determining best value.  It does not affect any vendor's offered price.  Examples of best value reasonableness of cost evaluation scenarios are as follows:

Example 1.   Lowest domestic offer is from a small business concern.   Since  Because a small business is offering a domestic end product, every vendor offering a foreign end product will have the price for the foreign product increased by 12% only for evaluation purposes by 12%.

Offeror	Business Size	Domestic End Product	Foreign End Product CLIN	Evaluation Factor	Offer Price	Evaluated Price (including applicable evaluation factor)
A	Large		x	12%	$100.00	$112.00
B	Small		x	12%	170.00	190.40
C	Large	x		N/A	200.00	200.00
D	Small	x		N/A	175.00	175.00

The new adjusted prices will be used for evaluation purposes against all other vendors, and not just the vendor offering the domestic end product. 

Example 2.  Small business set-aside, low offer is from a small business concern offering the product of a small business concern that is not a domestic end product.

Offeror	Business Size	Domestic End Product	Foreign End Product of another small business concern CLIN	Evaluation Factor	Offer Price	Evaluated Price (including applicable evaluation factor)
A	Small		x	12%	$100.00	$112.00
B	Small	x		N/A	150.00	150.00
C	Small		x	12%	200.00	224.00
D	Small	x		N/A	175.00	175.00

The new adjusted prices will be used for evaluation purposes against all other vendors, and not just the vendor offering the domestic end product.

Example 3.  Lowest domestic offer is from a large business concern.

Offeror	Business Size	Domestic End Product	Foreign End Product of another small business concern CLIN	Evaluation Factor	Offer Price	Evaluated Price (including applicable evaluation factor)
A	Large		x	6%	$100.00	$106.00
B	Large	x		N/A	150.00	150.00
C	Small		x	6%	200.00	212.00
D	Large	x		N/A	175.00	175.00

The new adjusted prices will be used for evaluation purposes against all other vendors, and not just the vendor offering the domestic end product.

 

(2)   The price of the domestic offer is reasonable if it does not exceed the evaluated price of the low foreign offer after addition of the appropriate evaluation factor.

(3)    The evaluation factor does not apply to offers of Canadian or Mexican end products, or to civil aircraft and related supplies of countries that are parties to the Agreement on Civil Aircraft.  Offers of these products are considered domestic end products for evaluation purposes (see below “Trade Agreements” section below).

(4)  The CO must apply the evaluation procedures to each line item of an offer unless either the offer or the solicitation specifies evaluation on a group basis.  The evaluated cost of each offer received is adjusted by any applied Buy American Act evaluation factor for each CLIN, as described in this subsection.

(5)  After applying the evaluation factor to the cost or price, the CO may determine which offer represents the best value for award purposes.

e.  Excepted Articles, Materials, and Supplies.   The following articles, materials or supplies are not mined, produced, or manufactured in the U.S. in sufficient and reasonably available commercial quantities of a satisfactory quality.   These items may be treated as domestic products for purposes of the Buy American Act requirements:

Acetylene, black. Agar, bulk. Anise. Antimony, as metal or oxide. Asbestos, amosite, chrysotile, and crocidolite. Bamboo shoots. Bananas. Bauxite. Beef, corned, canned. Beef extract. Bephenium hydroxynapthoate. Bismuth. Books, trade, text, technical, or scientific; newspapers; pamphlets; magazines; periodicals; printed briefs and films; not printed in the United States and for which domestic editions are not available. Brazil nuts, unroasted Cadmium, ores and flue dust. Calcium cyanamide. Capers. Cashew nuts. Castor beans and castor oil. Chalk, English. Chestnuts. Chicle. Chrome ore or chromite. Cinchona bark. Cobalt, in cathodes, rondelles, or other primary ore and metal forms. Cocoa beans. Coconut and coconut meat, unsweetened, in shredded, desiccated, or similarly prepared form. Coffee, raw or green bean. Colchicine alkaloid, raw. Copra. Cork, wood or bark and waste. Cover glass, microscope slide. Crane rail (85-pound per foot). Cryolite, natural. Dammar gum. Diamonds, industrial, stones and abrasives.

Emetine, bulk. Ergot, crude. Erythrityl tetranitrate. Fair linen, altar. Fibers of the following types: abaca, abace, agave, coir, flax, jute, jute burlaps, palmyra, and sisal. Goat and kidskins. Goat hair canvas. Grapefruit sections, canned. Graphite, natural, crystalline, crucible grade. Hand file sets (Swiss pattern). Handsewing needles. Hemp yarn. Hog bristles for brushes. Hyoscine, bulk. Ipecac, root. Iodine, crude. Kaurigum. Lac. Leather, sheepskin, hair type. Lavender oil. Manganese. Menthol, natural bulk. Mica. Microprocessor chips (brought onto a Government construction site as separate units for incorporation into building systems during construction or repair and alteration of real property). Modacrylic fur ruff. Nickel, primary, in ingots, pigs, shots, cathodes, or similar forms; nickel oxide and nickel salts. Nitroguanidine (also known as picrite). Nux vomica, crude. Oiticica oil. Olive oil. Olives (green), pitted or unpitted, or stuffed, in bulk. Opium, crude. Oranges, mandarin, canned.

Petroleum, crude oil, unfinished oils, and finished products. Pine needle oil. Platinum and related group metals, refined, as sponge, powder, ingots, or cast bars. Pyrethrum flowers. Quartz crystals. Quebracho. Quinidine. Quinine. Rabbit fur felt. Radium salts, source and special nuclear materials. Rosettes. Rubber, crude and latex. Rutile. Santonin, crude. Secretin. Shellac. Silk, raw and unmanufactured. Spare and replacement parts for equipment of foreign manufacture, and for which domestic parts are not available. Spices and herbs, in bulk. Sugars, raw. Swords and scabbards. Talc, block, steatite. Tantalum. Tapioca flour and cassava. Tartar, crude; tartaric acid and cream of tartar in bulk. Tea in bulk. Thread, metallic (gold). Thyme oil. Tin in bars, blocks, and pigs. Triprolidine hydrochloride. Tungsten. Vanilla beans. Venom, cobra. Water chestnuts. Wax, carnauba. Wire glass. Woods; logs, veneer, and lumber of the following species: Alaskan yellow cedar, angelique, balsa, ekki, greenheart, lignum vitae, mahogany, and teak. Yarn, 50 Denier rayon.

 

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Red Line Content: Procurement Guidance:

T3.6.4 Foreign Acquisition (Revision 56, JanuaryOctober 2007)

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