b. It has its principal place of business in the cooperating country.

c. It is more than 50 percent beneficially owned by a firm or firms of such country and/or by a U.S. firm or firms and/or by citizens of such country and/or U.S. citizens.

d. It is determined by the Mission Director to be an integral part of the local economy. 5. Limited Free World Firm:

An entity is a "limited free world firm" if it meets all of the conditions listed in subparagraphs a. and b. below as follows:

a. It is incorporated or legally organized in one of the limited free world countries listed in A.I.D. Geographic Code 901.

b. It has its principal place of business in the cooperating country or in a limited free world country.

6. Free World Firm:

An entity is a "free world firm" if it meets all of the conditions listed in subparagraphs a. and b. below as follows:

a. It is incorporated or legally organized in one of the free world countries listed in A.I.D. Geographic Code 899 and not listed in A.I.D. Geographic Code 901.

b. It has its principal place of business in a free world country listed in A.I.D. Geographic Code 899, including any country listed in A.I.D. Geographic Code 901.

7. Joint Venture:

A collaborative effort by two or more individual firms for the purpose of performing work under an A.I.D.-financed contract.

III. Order of Preference:

A. The Agency policy for single procurements of services financed by A.I.D. shall be: 1. To procure or authorize the procurement of A.I.D.-financed services from any of the following firms, in equal preference (except as noted in paragraph I.C. above): a. U.S. firm.

b. U.S.-controlled local firm.

c. Joint venture of the above firms.

2. Selection of other than the above firms shall only be made pursuant to a waiver based upon a written determination by the duly authorized A.I.D. official (See paragraph IV.B. below) that the proposed procurement will best serve the interests of the U.S. The order of preference for selecting a firm pursuant to such a waiver shall be as follows:

a. Preferred local firm.

b. Joint venture of a U.S. firm, U.S.controlled local firm, a preferred local firm, or more than one of these firms, joined with a local firm, provided that management control and responsibility for the joint venture rests with one or more of the above firms having principal management by U.S. citizens.

c. Local firms.

d. Joint venture of local firms with limited free world firms or free world firms.

e. Limited free world firm.

1. Free world firm.

IV. Waivers-Determinations (See Guide, Attachment B.):

A. Criteria:

2. Availability and/or quality of firms to perform the required services.

3. Comparative prices.

4. Nationality of contractor employees.

5. Desired U.S. identification at job sites. 6. Foreign policy objectives.

7. Willingness of contractors to accept a higher proportion of contract payments in the currency of the cooperating country. B. Authority:

1. Written determinations authorizing the procurement of services from those firms listed in paragraph III.A.2. above shall be approved by the Assistant Administrator having responsibility for the project office, without power of redelegation, with respect to each single procurement, regardless of size, except as stated in paragraphs IV.B.2. and IV.B.3. below.

2. Assistant Administrators are also authorized, without power of redelegation, to make continuing written determinations ("blanket" waivers) that the interests of the U.S. are best served by permitting the procurement of services for all or specified categories of procurement from (a) preferred local firms, (b) joint ventures described in paragraph III.A.2.b., or (c) local firms in equal preference with, (d) U.S. firms, (e) U.S.-controlled local firms, or (f) joint ventures of U.S. firms and U.S.-controlled local firms.

a. This authority to issue blanket waivers is limited to procurement contracts of $250,000 or less. It may apply to any program or programs in any countries within the responsibility of the Assistant issuing Administrator.

3. If the Assistant Administrator determines with respect to a particular country that the rules cited in paragraph 2. above would require waivers in all or substantially all cases of procurements in excess of $250,000, the circumstances may be documented and a request for a blanket waiver submitted to the Administrator or his Deputy.

4. Written determinations may be included either in the loan authorization or in a separate document.

C. Coordination:

1. In exercise of the authority herein provided, the Assistant Administrators or their designees shall furnish copies of the documents supporting the proposed determination to the following office(s), as appropriate, for comment:

a. Office of Procurement (A/PROC):

In those cases where the availability, quality, or relative costs of U.S. services is at issue.

b. Office of Engineering (ENGR):

In those cases where engineering or construction services are involved.

A. The policy contained in paragraph III. is applicable to all A.I.D.-financed subcontracts requiring A.I.D. approval, including any lower-tier subcontracts, and shall be given effect through the prime contract provisions, as appropriate.

B. Waiver of this policy shall be obtained in accordance with the procedures contained in paragraph IV. herein and may be granted to the prime contractor for proposed subcontract(s) either (1) in the terms of his contract or (2) on a case-by-case basis. VI. Reporting and Control:

A. Every waiver issued, including blanket waivers, is reported and controlled in accordance with the following procedure:

1. All approved waivers shall be consecutively numbered by the office granting the waiver.

2. Waivers shall be returned to the drafting office for distribution of copies to each clearing office, the cognizant Regional Bureau or Office, PC/SRD, EXSEC, A/PROC, C/FRD, ENGR, and other offices, appropriate.

3. Waivers shall be reported as follows: a. Quarterly Waiver Report:

as

(1) PC/SRD shall report quarterly all source waivers granted for contract services.

(2) The information reported shall be included in the Quarterly Waiver Report, W140. (See M.O. 1414.1.1-Source Requirements for Commodities: Waiver Authority and Procedures, for the commodity source waiver portion of the report.)

b. Semiannual Report of Blanket Waivers: (1) A.I.D. officers who approve or sign contracts shall submit a semiannual report to PROC/CSD of all contract actions effected under blanket waivers.

(2) The report shall contain the (a) blanket waiver number, (b) contractor's name, (c) type of firm (See paragraph II.D. above.). (d) contract amount, and (e) contract number and task order number (if appropriate).

(3) The report shall cover the six months periods ending June 30 and December 31, respectively, and shall be submitted within 20 working days after the end of the reporting period.

VII. Contractor Employees:

It shall be the policy of A.I.D. to employ citizens or residents of the U.S. or of the

cooperating country in preference to the employment of third-country nationals.

A. Unless the A.I.D. officer who approves or signs the contract determines that the circumstances necessitate recruitment of personnel from a third country, all supervisory personnel and all professional personnel (See paragraphs B. and C. below.) to be employed under the contract, excluding construction contracts (See M.O. 1412.1.2-Service Contracting: Use of Third Country Nationals on A.I.D.-Financed Construction (A.I.D. Regulation 7).), and major subcontracts thereunder, shall be citizens or residents (prior to the time of employment) of the U.S. and/or of the cooperating country. Where it is considered that the services of third-country nationals will be needed and it is determined to be in the best interests of the objectives of the program, a provision authorizing their employment shall be contained in the contract. Where exceptions are not contained in the contract, waivers to permit employment of third-country nationals shall be granted by the A.I.D. officer who approved or signed the contract, on the basis of a written determination that the circumstances necessitates such employment. This requirement shall apply to all firms or joint ventures mentioned in this manual order except when a waiver is granted to procure from a free world or a limited free world firm. Whenever it is necessary to assure U.S. jobsite identification on a particular project, the work statement or other applicable contractual provisions shall require an appropriate degree of management participation by U.S. citizens.

B. For the purposes of this section, an individual shall be considered a professional if he is engaged in providing services requiring specialized training in some liberal art or science, usually involving mental rather than manual work and who is qualified in his field by the standards of the profession, e.g., lawyers, doctors, professors, teachers, engineers, economists, scientists, and research associates.

C. Supervisory personnel are defined as those contractor employees who are assigned the responsibility for an area of work under the contract and the direction of the work of other contractor employees. Generally, with respect to said employees, they are responsible for the employee's selection, orientation, workload organization and scheduling; training, evaluation of performance, and necessary disciplinary action.

VIII. Place of Performance:

Prospective contractors shall be required to indicate in advance, and the contract shall specify, the extent to which work under the contract is to be performed outside the United States and the cooperating country.

Assistant Administrator 1 (limited to single procurements of $250,000 or less).

Administrator or his Deputy (single procurements in excess of $250,000).

§ 7-6.5201-1

AID Geographic Code.

"AID Geographic Code" means the number assigned to a country, area, or group of countries or areas as listed in the Geographic Code Book, issued by the Statistics and Reports Division, AID, Washington, and filed with the AID Manual as Manual Order 302.1. Four principal codes are referred to in this subpart and standard forms in current use:

000-The United States, as defined in AIDPR 7-6.5201-6.

899-Any area or country in the Free World, excluding the cooperating country itself when used as a possible source of AID-financed purchases.

§ 7-6.5201-5 Source.

"Source" means the country from which a commodity is shipped to the cooperating country, or the cooperating country if the commodity is located therein at the time of the purchase. Where, however, a commodity is shipped from a free port or bonded warehouse in the form in which received therein, "source" means the country from which the commodity was shipped to the free port or bonded warehouse.

§ 7-6.5201-6 United States.

"United States" means the States, the District of Columbia, Puerto Rico, American Samoa, the Canal Zone, the Virgin Islands, Guam, Ryukyu Islands under U.S. control, any areas subject to the complete sovereignty of the United States, and Trust Territories administered by the United States, including the Pacific Islands.

§ 7-6.5202 Background.

AID policy on foreign procurements has a number of roots. These include the Foreign Assets Control and Cuban

Assets Control Regulations, issued by the Treasury Department, which establishes policies for the barring of procurement from sources outside the Free World. They are published in Parts 500 and 515 of Title 31 of the Code of Federal Regulations. In addition, section 604(a) of the Foreign Assistance Act, as implemented by a Presidential determination of October 18, 1961, as amended (26 F.R. 10543, 27 F.R. 7603), limits procurement, from these developed countries:

Australia, Austria, Belgium, Canada, Denmark, France, Germany (Federal Republic), Italy, Japan, Luxembourg, Monaco, Netherlands, New Zealand, Norway, South Africa, Spain, Sweden, Switzerland, and the United Kingdom.

Subsequent Presidential directives require that no dollar be sent abroad that can be sent instead in the form of U.S. goods and services.

Commodities procured with U.S. dollars rather than with local currencies for foreign assistance projects will be of U.S. source and shall have been mined, grown, or through manufacturing, processing, or assembly produced in the United States. Exceptions to this policy may be made in accordance with M.O. 1414.1.1.

[33 F.R. 4253, Mar. 7, 1968]

§ 7-6.5204 Commodities procured under supply contracts.

The following certification must be attached to or endorsed on each invoice presented for payment under all supply contracts for procurement in the United States, and any supply contract which exceeds $2,500 for procurement outside the United States to which this subpart applies and must be signed by the supplier or his authorized representative:

I (We) hereby certify that the "source" (as defined by AID) of the commodities listed on the attached invoice or invoiced herein is as shown below and that such invoiced commodities were mined, grown, or produced in a country or countries covered by AID Geographic Code I (We) further certify that, to the best of my (our) information and belief, with respect to any produced commodity invoiced, (a) the cost of components (delivered to point of production) acquired by the producer of the commodity in the form in which imported into the country of production from Free World countries other than countries covered by AID Geographic Code

does not exceed in total cost 10 percent of the lowest price (excluding the cost of ocean transportation and marine insurance) at which I (we) make the commodity available for export sale (whether or not financed by AID), and (b) the produced commodity does not contain any components (1) imported from countries not included under AID Geographic Code 899 or (ii) prohibited by the Foreign Assets Control (FAC) or Cuban Assets Control (CAC) Regulations of the U.S. Treasury Department, or (c) if AID has excepted the commodity from any of the foregoing requirements, the commodity meets all conditions specified by AID in connection with such exception. I (We) understand that a false certification made herein may be punishable by law.

Source of commodities

Authorized signature of supplier

Title Date

§ 7-6.5205 Commodities procured under service contracts.

U.S. dollar funded contracts for the performance of services will require a U.S. source for all commodities to be delivered under the contract, in whatever form and for all commodities the cost of which (including charges for use) is subject to reimbursement in U.S. dollars. With respect to any such commodities which cost more than $2,500 to procure or acquire (including charges for use), they shall have been mined, grown, or through manufacturing, processing, or assembly produced in the United States and an appropriate certificate will be required. For cost reimbursement contracts, the certification requirement is generally met by the Contractor furnishing suppliers' certificates, as provided in the contract. A form for such certification is set out in Appendix A to AID Regulation 1 published in Part 201, Title 22 of the Code of Federal Regulations, and reproduced in AID Manual Order 1456.1. If (a) the effective use of printed or audiovisual teaching materials depends upon their being in the local language, and (b) such materials are intended for technical assistance projects or activities financed by AID in whole or in part, and (c) other funds, including U.S.-owned or controlled local currencies, are not readily available to finance the procurement of such materials, local language versions may be procured from the following sources, in order of preference:

Countries selected from Geographic Code: (1) 000 United States, including the AID Regional Technical Aid Centers.

The relevant code shall be stated in the contract.

[32 F.R. 8468, June 14, 1967, as amended at 33 F.R. 4253, Mar. 7, 1968; 34 F.R. 7076, Apr. 30, 1969]

§ 7-6.5206 AID policy and Buy American Act.

In the case of procurements which are made solely for use within the United States and for which standard Government forms, such as Standard Form 32 (FPR 1-16.901-32), are used, the standard Buy American provision need not be supplemented or superseded by a clause or clauses implementing the more stringent AID policy. The purpose of this exception is to permit uniformity among Federal agencies procuring for domestic