major components listed in the description required by paragraph (b)(1), above. To the extent available, identify labor, material, and indirect costs, and any amount included for contingencies. List separately materials and equipment that will be furnished by the Government and the total related cost.

(ii) Prepare an estimated time for completion with an explanation of the basis therefor.

(4) Maximum fixed fee. Determine, in accordance with agency procedures, the maximum fixed fee that may be paid for the required services.

(c) Conclusion of negotiations. Negotiations relative to the contract and fee shall be concluded at as early a date as practicable. When mutually acceptable terms of contract, estimate of cost, and estimate of time of performance have been agreed to, the fixed fee should be negotiated. Generally, negotiations relative to the fee shall be successfully concluded prior to making commitment on final selection. In the event it is necessary to use a letter contract, it should include the basis for determining the fee, which establishes the possible range of fees for the work. Should it be evident in the course of negotiations that no hope exists for a meeting of the minds within the previously determined maximum allowable (ceiling) fee, then consideration should be given to terminating negotiations and entering into a similar action with the next best qualified contractor (§ 1-18.307-2).

§ 1-18.306-3

Selection of a cost-reimbursement type contractor.

(a) Construction contractors for costreimbursement type contracts shall be selected on the basis of qualifications and the ability to provide the particular services required (see § 1-3.805-2). The evaluation for purposes of determining relative qualifications of firms under consideration should be performed in accordance with agency procedures.

(b) Fee proposals for construction services should be secured as a part of the selection procedure if evaluation shows that there are several available contractors equally well qualified to undertake construction of a project on a CPFF basis, and if the scope is sufficiently defined to permit a reasonably accurate estimate of the cost of the work. Where these conditions prevail and amounts of the fee proposals are the only significant differences in the overall proposals of

§ 1-18.309 Record of negotiations.

The record of negotiations shall demonstrate conformity with the requirements of § 1-3.101 and, to the extent applicable, include the general type of information indicated in the paragraphs below. The scope and detail of information to be included generally should be determined on the basis of the nature, dollar value, and complexity of the transactions involved:

(a) Name and address of contractor;
(b) Location of construction site;
(c) Contract number;

(d) Nature of contract action (letter contract, conversion of letter contract, etc., as well as type of contract);

(e) Program basis for the contract; (f) Description of the project;

(g) Total price or estimated cost; (h) Term of contract and construction schedules;

(i) Justification for use of negotiation in lieu of formal advertising;

(j) The request for proposals;

(k) Number of firms invited to submit proposals and a list of the firms quoting along with their respective quotations;

(1) Reasons for selection of the proposed contractor (If a fixed-price award is made to other than the low offeror, explain.);

(m) A summary of principal points involved in negotiation and the final results thereof (The record should be in sufficient detail to reflect the most significant considerations controlling the establishment of the initial or revised price or fee.);

(n) For fixed-price contracts, an explanation of why cost or pricing data were, or were not, required (see § 1-3.807) and, if not required in the case of any price negotiation in excess of $100,000, give the basis for determining that the price resulted from adequate price competition (If cost or pricing data were submitted and a certificate of cost and pricing data was required (§ 1-3.807-4), show the reliance placed upon the factual cost or pricing data submitted and the use of these data by the contracting officer in determining his total price objective.);

(0) For cost-reimbursement type contracts, the fee determination in detail including the cost breakdown used to arrive at the estimated cost for fee computation purposes;

(p) Names and locations, when available, of prospective subcontractors and estimated amounts of respective subcontracts which will exceed $100,000;

(q) If the contract contains any form of price redetermination or escalation, the reasons for such inclusion;

(r) General types and values of Government property to be furnished;

(s) Funding data; and

(t) The names and affiliations of all persons taking part in or present at the negotiations.

Subpart 1-18.4-[Reserved] Subpart 1-18.5-[Reserved] Subpart 1-18.6-Buy American Act § 1-18.600

Scope.

to the construction site for incorporation in the building or work.

(c) "Component" means any article, material, or supply directly incorporated in construction material.

(d) "Domestic construction material" means an unmanufactured construction material which has been mined or produced in the United States, or a manufactured construction material which has been manufactured in the United States if the cost of its components which are mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. The cost of components shall include transportation costs to the place of incorporation into the construction material and, in the case of components of foreign origin, duty (whether or not a duty-free entry certificate may be issued).

(e) "Nondomestic construction material" means a construction material other than a domestic construction material.

(f) "United States" means the States, the District of Columbia, Puerto Rico, American Samoa, the Canal Zone, the Virgin Islands, and any other place subject to its jurisdiction. § 1-18.602

§ 1-18.602-1

Buy American policy.
General.

Only domestic construction material shall be used in the performance of contracts for construction in the United States made by executive agencies, except for particular material as to which it is determined:

(a) By the agency head, that to make such requirement is impracticable;

(b) In accordance with agency procedures, that domestic construction material is unavailable in sufficient and reasonably available commercial quantities and of a satisfactory quality; or

(c) In accordance with § 1-18.603, that to make such requirement would unreasonably increase the cost.

§ 1-18.602-2 Determining domestic construction material.

In determining whether a construction material is a domestic construction material:

(a) Only the construction material and its components shall be considered; and

(b) A component shall be considered to have been mined, produced, or manufactured in the United States (regardless of its source in fact) if the construction material in which it is incorporated is

manufactured in the United States and the component is of a class or kind determined by the agency concerned to be not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.

§ 1-18.602-3 Panamanian material used in Canal Zone.

Construction material mined, produced, or manufactured in the Republic of Panama, when purchased for use in the Canal Zone, is exempted from the provisions of the Buy American Act (under item 3 of the Memorandum of Understandings Reached Ancillary to the Treaty of Mutual Understanding and Cooperation between the United States of America and the Republic of Panama, signed January 25, 1955).

§ 1-18.602-4 Noting exceptions and findings.

Exceptions for nondomestic construction material because use of particular domestic construction material would be impracticable or would unreasonably increase the cost or because domestic construction material is unavailable shall be noted in the contract. Findings justifying such exceptions shall be made a matter of public record.

A determination shall be made that the use of domestic construction material would unreasonably increase the cost where, with respect to each particular construction material:

(a) A bid or proposal offers nondomestic construction material (not listed as excepted in the invitation for bids or request for proposals), the cost of which, plus 6 percent thereof, is less than the cost of comparable domestic construction material; and

(b) That bid or proposal offers the lowest price of any received, after adding to each bid or proposal, for evaluation purposes, 6 percent of the cost of all nondomestic construction material, which qualifies under paragraph (a), above, offered in each bid or proposal. § 1-18.603-2 Cost computation.

The cost of construction material shall be computed as including all cost of delivery to the construction site. The cost of nondomestic construction mate

rial shall also include any applicable duty. Computations shall be based on costs on the date of opening of bids or proposals.

§ 1–18.603–3 Deviations by agency head.

Deviations from the requirements of § 1-18.603-1 may be authorized by the agency head in accordance with § 1-1.009 of this chapter, the Buy American Act, and Executive Orders 10582 and 11051. § 1-18.603-4 Small business.

Nothing in § 1-18.603-1 shall affect the authority or responsibility of an executive agency to place a fair proportion of its total contracts with small business concerns.

Except for contracts executed on Standard Form 19, invitations for bids and requests for proposals for affected construction work shall include the following provision:

INFORMATION REGARDING BUY AMERICAN ACT

(a) The Buy American Act (41 U.S.C. 10a10d) generally requires that only domestic construction material be used in the performance of this contract. (See the clause entitled "Buy American" in Standard Form 23A, General Provisions, Construction Contract.) This requirement does not apply to the following construction material components:

or

[List the excepted construction material or components.]

(b) (1) Furthermore, bids or proposals offering use of additional nondomestic construction material may be acceptable for award if the Government determines that use of comparable domestic construction material is impracticable or would unreasonably increase the cost or that domestic construction material (in sufficient and reasonably available commercial quantities and of a satisfactory quality) is unavailable. Reliable evidence shall be furnished justifying such use of additional nondomestic construction material.

(2) Where it is alleged that use of domestic construction material would unreasonably increase the cost:

(i) Data shall be included, based on a reasonable canvass of suppliers, demonstrating that the cost of each such domestic construction material would exceed by more than 6 percent the cost of comparable nondomestic construction material. (All costs of delivery to the construction site shall be included, as well as any applicable duty.)

(ii) For evaluation purposes, 6 percent of the cost of all additional nondomestic construction material, which qualifies under paragraph (1), above, will be added to the bid or proposal.

(a) Agreement. In accordance with the Buy American Act (41 U.S.C. 10a-10d), and Executive Order 10582, December 17, 1954 (3 CFR, 1954-58 Comp., p. 230), as amended by Executive Order 11051, September 27, 1962 (3 CFR, 1959-63 Comp., p. 635), the Contractor agrees that only domestic construction material will be used (by the Contractor, subcontractors, materialmen, and suppliers) in the performance of this contract, except for nondomestic material listed in the contract.

(b) Domestic construction material. "Construction material" means any article, material, or supply brought to the construction site for incorporation in the building or work. An unmanufactured construction material is a "domestic construction material" if it has been mined or produced in the United States. A manufactured construction material is a "domestic construction material" if it has been manufactured in the United States and if the cost of its components which have been mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. "Component" means any article, material, or supply directly incorporated in a construction material.

(c) Domestic component. A component shall be considered to have been "mined, produced, or manufactured in the United States" (regardless of its source in fact) if the article, material, or supply in which it is incorporated was manufactured in the United States and the component is of a class or kind determined by the Government to be not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.

§ 1-18.801 See

Definitions.

1-8.101. As used in this subpart, the following terms have the meanings set forth below.

(a) "Construction equipment" means automotive vehicles, earth movers, cranes, batching plants, crushers, pavers, mixers, generators, compressors, pumps, drills, welders, forms, and other items of equipment (other than hand tools) used or capable of being used in construction work.

(b) "Terminated portion of the contract" with respect to a contract which has been completely terminated for the convenience of the Government means the entire contract, notwithstanding the completion of, and payment for, individual items of work prior to termination (see § 1-18.802-4).

§ 1-18.802 Termination for convenience of the Government.

See Subpart 1-8.2 for general principles and procedures applicable to all terminations for the convenience of the Government, Subpart 1-8.3 for general principles and procedures applicable to termination of fixed-price contracts for convenience, and Subpart 1-8.4 for general principles and procedures applicable to termination of cost-reimbursement contracts for convenience.

§ 1-18.802-1 Use of clauses.

Use of a clause providing for termination for convenience of the Government is required in every construction contract in excess of $10,000. Contracts which do not exceed $10,000 may provide for termination for convenience. The specific requirements regarding the use of such clauses are as follows:

(a) Fixed-price construction contracts. See § 1-8.700-2(a) (5) and (6)

(a) Inventory basis. The inventory basis of settlement is appropriate for use under the following circumstances:

(1) The partial termination of a construction contract; and

(2) The partial or complete termination of supply orders under any terminated construction contract.

(b) Total cost basis. The total cost basis of settlement shall be used in all cases where a construction contract is completely terminated. Line 10, section II of the format set forth in § 1-8.802-2, "Deduct-Finished Product Invoiced or To Be Invoiced" is not to be used. All progress and other payments shall be used to reduce the gross amount of the settlement.

tory (§ 1-8.101(e)) generated under construction contracts. They apply to termination inventory and to any other inventory which is:

(a) Excess because of a contract modification; or

(b) Excess under a price revision type contract; and the cost thereof is included in the contractor's claim for an equitable adjustment or revision in price. They also apply to all property which is excess to the requirements of a cost-reimbursement type contract and include excess Government-furnished property under any type contract.

§ 1-18.802-7 Separate schedules.

See § 1-8.503-2. Construction equipment shall be submitted on separate inventory schedules.

Materials taken from stock and shipped to the construction site shall be considered common items (§§ 1-8.101(b) and 1-8.503-5) and shall be returned to stock unless the contractor establishes that such items cannot be utilized without loss. Contractors shall not include in their settlement proposals the cost of any material so returned. Any costs in connection with the withdrawal, replacement, or transportation of such materials may be included as "Other Costs." (Section II, Item 8, and Section II, Item 5, respectively, of the formats set forth in §§ 1-8.802-1 and 1-8.802-2.) § 1-18.802-9 Allocability of contractoracquired property on inventory schedules.

It is the responsibility of the contracting officer to determine that all property listed on inventory schedules is qualitatively and quantitatively allocable to the terminated contract or the terminated portion thereof, taking into consideration any work in place. Also, where applicable, the contracting officer must determine that the difference between the cost of allocable property on the inventory schedules and the total cost of property included in the settlement represents the cost of property incorporated in the work or consumed in the performance thereof.

§ 1-18.802-10 Contractor's certificateproperty incorporated in work.

Each contractor whose settlement proposal includes the cost of property (materials, etc.) incorporated into the