Made in Federal Penal and Correctional Institutions" (hereinafter called the "Schedule") to the extent that such products are available and meet the requirements of the ordering office.

§1-5.403 Preferences in the choice of procurement sources.

(a) Suitable Government used or excess property is the first source of supply (see § 1-1.302-1).

(b) Where similar products are produced both by Federal penal and correctional institutions and by workshops for blind and other severely handicapped, but the products are not availthable from FPI, they shall be procured

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from the workshops for blind and other Pri severely handicapped before utilizing commercial sources.

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(c) Services shall be procured from workshops for blind and other severely handicapped to the extent they are availntable before such services are procured ia from FPI or commercial sources.

ct of (d) Other sources of supply may be The itilized when products or services are authnot available as provided in paragraphs a), (b), and (c) of this § 1-5.403. oard 1-5.404 Schedule of products and

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1

services.

ion. Products manufactured by Federal or, enal and correctional institutions are the Droduced in strict conformance with rney federal or other applicable specifications. of the heir sale is restricted by law to departandents and agencies of the Federal Govined #nment. The products and services instiailable are listed in the Schedule. earning

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in Cal-5.405 Non-mandatory procurement tional of prison-made products.

of

more thIf a product is not listed on the Schedcupatio but is of a type normally produced by he ind deral penal and correctional instituitles ns, agencies are encouraged to solicit I to determine the feasibility of adding cts and item to its Schedule.

d so that

bear 5.406 Procurement procedures.

From the activities

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abor.

cts.

and

5.406-1 Carload quantities items not stocked by the General Services Administration (GSA). Orders for (a) carload lots, and (b) procuducts which are not stocked by GSA ll be prepared in accordance with the cedures contained in the Schedule forwarded in duplicate to Federal son Industries, Inc., U.S. Department Justice, Washington, DC 20537.

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(a) A clearance by FPI is required before procuring products from other sources which are available from FPI, except

(1) For purchases of less than carload lots of common use items, as listed in Schedule A of the Schedule, when they are purchased from the Federal Supply Service of GSA;

(2) When immediate delivery or performance is required by public exigency; (3) When suitable used or excess Government property can be secured;

(4) When the products are procured and used outside the United States;

(5) When requirements are for unlisted items other than canvas itmes, signs, or furniture costing $100 or less;

or

(6) When orders are for listed items amounting to $25 or less that require delivery within 10 days (refer to individual sections of the Schedule for special clearance instructions pertaining to a particular class of product).

(b) Formal clearance on FPI Form 34 will be issued promptly for all products which are not available. Telegraphic clearances may be issued in emergencies, but clearances cannot be issued subsequent to purchase. Clearances should be attached to the initial voucher to prevent an exception being taken by the General Accounting Office.

(c) General or blanket clearances may be issued when classes of products are not available.

(d) Purchases from other sources because of lower prices are not authorized, and no clearances may be issued on this basis.

(e) Disputes regarding price, quality, character, or suitability of products produced by FPI are subject to arbitration as specified in 18 U.S.C. 4124. The statute provides that the arbitration shall be conducted by a board consisting of the Comptroller General of the United States, the Administrator of General Services, and the Director of the Office of Management and Budget, or their representatives. The decisions of the board are final and binding on all parties.

Agencies shall assist the contractors which they have authorized to use GSA supply sources to obtain pertinent Federal Supply Schedules and the GSA Stock Catalogs, and shall furnish them with any other desired information. Such schedules and catalogs may be obtained from any GSA regional office.

§ 1-5.905 Payment for GSA stores stock. Bills for GSA stores stock are not rendered by GSA until after shipment has been made. Receipt of billing is construed as sufficient evidence of delivery to establish liability and make payment. Accordingly, agencies should direct their contractors to make payments promptly upon receipt of billings (see § 101-26.103 (d) (2) of this title).

Subpart 1-5.10-[Reserved]

Certificate.

Contract clause.

Subpart 1-6.9-[Reserved]

Subpart 1-6.10-Omission of the Examination of Records Clause From Contracts With Foreign Contractors

(b) "Components" means those articles, materials, and supplies which are directly incorporated in end products.

(c) "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.

(d) "Domestic source end product' means an unmanufactured end product which has been mined or produced in the United States, or an end product 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 end product and, in the case of components of foreign origin, duty (whether or not a duty-free entry certificate may be issued. A component shall be considered to have been mined, produced or manufactured in the United States (regardless of its source in fact) if the end product in which it is incorporated is manufactured in the United States and the component is of a class or kind (1) determined by the Government to be not mined, produced, or on manufactured in the United States in rot sufficient and reasonably available commercial quantities and of a satisfactory quality, or (2) as to which the head of the agency concerned has determined that it would be inconsistent with the public interest to apply the restrictions of the Buy American Act.

(e) "Foreign end product" means an end product other than a domestic source end product.

(f) "Domestic bid" means a bid or offered price for a domestic source end product, including transportation destination.

to

(g) "Foreign bid" means a bid or offered price for a foreign end product Including transportation to destination and duty (whether or not a duty-free the entry certificate may be issued.)

§1-6.102 Statutory requirements. Except as provided in § 1-6.103, the Buy American Act requires that in the procurement of supplies and services only domestic source end products shall be acquired for public use. In determining whether an end product is a domestic source end product, only the end

The Buy American Act does not apply to articles, materials, or supplies of a class or kind which the Government has determined are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality. (See § 1-6.105.)

§ 1-6.103-3 Unreasonable cost or in. consistency with the public interest.

The restrictions of the Buy American Act do not apply when it is determined by the head of an agency that the cost of a domestic source end product would be unreasonable or that its acquisition would be inconsistent with the public interest. Such determination shall be made in accordance with § 1-6.104-4. § 1-6.103-4 Scrap.

Scrap generated in, collected in, and prepared for processing in the United States shall be considered as of domestic origin.

§ 1-6.103-5 Panamanian supplies for use in Canal Zone.

Articles, materials, and supplies that are mined, produced, or manufactured In the Republic of Panama, when purchased for use in the Canal Zone, are 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).

§ 1-6.104-3 Certificate.

Invitations for bids and requests for proposals shall require that each bid or proposal include a certificate substantially as follows:

BUY AMERICAN CERTIFICATE

The bidder or offeror hereby certifies that each end product, except the end products listed below, is a domestic source end product (as defined in the clause entitled "Buy American Act"); and that components of unknown origin have been considered to have been mined, produced, or manufactured outside the United States:

Excluded end products (show country of origin for each excluded end product):

§ 1-6.104-4 Evaluation of bids and proposals.

(a) Unless otherwise determined by the head of the agency in accordance with the Buy American Act, where the procedures in this § 1-6.104-4 result in the acquisition of foreign end products, the acquisition of domestic source end products would be (1) unreasonable in cost or (2) inconsistent with the public interest (see § 1-6.103-3).

(b) Except as provided in paragraph (d) of this section, bids and proposals shall be evaluated as provided in this section so as to give preference to domestic bids. Each foreign bid shall be adjusted for purposes of evaluation by adding to the foreign bid (inclusive of duty) a factor of 6 percent of that bid, except that a 12 percent factor shall be used instead of the 6 percent factor if the firm submitting the low acceptable domestic bid is a small business concern or a labor surplus area concern (as defined in §§ 1-1.701 and 1-1.801, respectively), or both. However, if an award for more than $100,000 would be made to a domestic concern if the 12 percent factor is applied, but would not be made if the 6 percent factor is applied, the case shall be submitted to the head of the agency for decision as to whether the award to the small business concern or labor surplus area concern would involve unreasonable cost or inconsistency with the public interest (see § 1-6.103-3). If the foregoing procedure results in a tie between a foreign bid as evaluated and a domestic bid, award shall be made on the domestic bid. When more than one line item is offered in response to an invitation for bids or request for proposals,

the appropriate factor shall be applied on an item-by-item basis, except that the factor may be applied to any group of items as to which the invitation for bids or request for proposals specifically provides that award is to be made on a par ticular group of items.

(c) Proposed awards shall be submitted, in accordance with agency proce dures, to the agency head for decision where:

(1) Rejection of an acceptable low for eign bid is considered necessary to protect essential national security interests, such as maintenance of a mobilization base. Prior to rejection of bids or offered prices on the grounds that such rejection is necessary to protect essential national security interests, advice shall be ob tained from the President or Director, Office of Emergency Planning.

(2) Rejection of any bid or proposal for other reasons of the national interest is considered necessary. However, infor mation concerning rejection of bids or offered prices for reasons of the national interest not described or referred to in Executive Order No. 10582 shall be fur. nished to the Executive Office of the President, Bureau of the Budget.

(d) Deviations from the requirements of this § 1-6.104-4 may be authorized by the head of the agency in accordance with the Buy American Act and Execu tive Order No. 10582, as amended. § 1-6.104-5 Contract clause.

(a) The following clause shall be in serted in all contracts for supplies and in contracts for services involving fur nishing supplies; except that it need not be inserted in contracts exclusively for articles, materials, and supplies for use outside the United States or which are of Panamanian origin for use in the Canal Zone:

United States and (B) an end product manufactured in the United States if the cost of the components thereof which are mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. For the purposes of this (a) (111) (B), components of foreign origin of the same type or kind as the products referred to in (b) (11) or (111) of this clause shall be treated as components mined, produced, or manufactured in the United States.

(b) The Contractor agrees that there will be delivered under this contract only domestic source end products, except end products:

(1) Which are for use outside the United States:

(11) Which the Government determines are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality:

(11) As to which the Secretary determines the domestic preference to be inconsistent with the public interest; or

(iv) As to which the Secretary determines the cost to the Government to be unreasonable.

(The foregoing requirements are administered in accordance with Executive Order No. 10582, dated December 17, 1954.)

(b) Where the term "secretary” is inapplicable to the agency, the term "head of the agency" may be substituted in the clause prescribed in § 1-6.104–5(a) when the contract does not contain the clause in § 1-7.102-1.

[29 FR 10189, July 24, 1964, as amended at 38 FR 6670, Mar. 12, 1973]

§ 1-6.105 Excepted articles, materials, and supplies.

Determinations under § 1-6.103-2 that certain articles, materials, and supplies are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality shall be made by each agency in accordance with agency procedures. Subpart 1-6.2-Buy American ActConstruction Contracts

§ 1-6.201

Cross-reference.

See Subpart 1-18.6 for implementation of the Buy American Act with respect to construction contracts. [33 F.R. 14287, Sept. 21, 1968] Subpart 1-6.8-Balance of Payments Program

SOURCE: The provisions of this Subpart 1-6.8 appear at 32 F.R. 5622, Apr. 6, 1967. unless otherwise noted.

The policies and procedures in this subpart provide for the use of excess and near excess foreign currencies and reflect the recommendation of the President's Cabinet Committee on Balance of Payments that, with the exception of the Agency for International Development, all Federal agencies procuring for use abroad should, in general, procure domestic materials unless the delivered cost of domestic materials is estimated to be 50 percent greater than the cost of like materials of foreign origin. AID is expected to follow this policy on its administrative procurement only, continuing its more restrictive buying policies on other procurement. For purposes of carrying out this decision on procurement for use abroad, it is suggested that agencies generally follow the definition of "domestic product" which is provided in Executive Order No. 10582, although it is recognized that some flexibility in the use of this definition may be warranted in exceptional circumstances.

As used in this subpart, the following terms have the meanings set forth in this § 1-6.802.

(a) "End products" means articles. materials, and supplies, which are to be acquired for public use As to a given contract, the end products are the items to be delivered to the Government, as specified in the contract, including supplies to be acquired by the Government for public use in connection with service contracts, but excluding installation and other services to be performed after delivery.

(b) "Components" means those articles, materials, and supplies, which are directly incorporated into end products

(c) "United States" means the States, District of Columbia, Puerto Rico, American Samoa, the Canal Zone, the Virgin Islands, and any other place subject to the jurisdiction of the United States.