are not used, and (3) any contract award to a domestic concern which would result from applying the 12 percent factor, but which would not result from applying the 6 percent or 50 percent factor, would not exceed $100,000. (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 or 50 percent factor is applied, the matter shall be submitted to the Secretary for a decision as to whether the award to the small business or labor surplus area concern would involve unreasonable cost or inconsistency with the public interest). If the foregoing procedure results in a tie between a foreign bid as evaluated and a domestic bid, award shall be made on the latter. 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 may be made on a particular group of items.

(c) The following examples illustrate how the procedure in paragraph (b) of this section should be applied. Throughout these examples, "foreign bid" means a bid or offered price for a foreign end product which is not a Canadian end product; "domestic bidlarge" means a domestic bid which is not from a small business or labor surplus area concern, and "domestic bidsmall" means a domestic bid which is from either a small business concern or a labor surplus area concern or both.

Award on Domestic Bid-Large. Domestic Bid-Small is out because it is not the low acceptable domestic bid. Foreign Bid, if adjusted by the 50-percent factor, would be $14,500 less $4,500 duty (i.e., $10,000), plus 50 percent of $10,000 (i.e., $5,000), or $15,000; but if adjusted by the 6-percent factor, it would be $14,500 plus 6 percent of $14,500 (i.e., $870), or $15,370; therefore, the 6-percent factor is added and Domestic BidLarge is the low evaluated bid.

(d) (1) Low bids offering Canadian end products of the type described in § 6.103-50 shall be evaluated on a parity with domestic bids (whether or not a duty-free entry certificate may be issued) except that any applicable duty shall be added.

(2) Proposed award shall be submitted to Secretary via the Commandant (FS) for a decision where:

(i) Rejection of an acceptable low foreign bid is considered necessary to protect essential national security interests, such as maintenance of a mobilization base; or

(ii) Rejection of any bid or proposal for other reasons of the national interest is considered necessary.

(a) In acquiring end products, the Buy American Act (41 U.S.C. 10a-d) provides that the Government give preference to domestic source end products. For the purpose of this clause:

(1) "Components" means those articles, materials, and supplies, which are directly incorporated in the end products;

(ii) "End products" means those articles, materials, and supplies, which are to be acquired under this contract for public use; and

(iii) A "domestic source end product" means (A) an unmanufactured end product which has been mined or produced in the 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 or Canada exceeds 50 percent of the cost of all its components. For the purposes of this (a) (iii) (B), components of foreign origin of the same type or kind as the products referred to in (b) (ii) or (iii) 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;

(ii) 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.

(iii) 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. So as to alleviate the impact of expenditures on the United States balance of international payments, bids offering domestic source end products normally will be evaluated against bids offering other end products by adding a factor of fifty percent (50%) to the latter, exclusive of import duties. Details of the evaluation procedure are set forth in Subpart 11-6 of Title 41 CFR.)

In contracts for food items, delete the words "or Canada" in paragraph (a) (iii) (B) of the above clause.

(2) Gasoline-a refined petroleum distillate which by its composition, is suitable for use as a carburant in internal combustion engines;

(3) Jet fuel-a refined petroleum distillate used to fuel jet propulsion engines;

(4) Naphtha-a refined petroleum distillate falling within a distillation range overlapping the higher gasoline and the lower kerosenes;

(5) Fuel oil-a liquid or liquefied petroleum product burned for lighting or for the generation of heat or power and derived directly or indirectly from crude oil, such as kerosene, range oil, distillate fuel oils, gas oil, diesel fuel, topped crude oil, residues;

(6) Lubricating oil-a refined petroleum distillate or specially treated petroleum residue used to lessen friction between surfaces;

(7) Residual fuel oil-a topped crude oil or viscous residuum which, as obtained in refining or after blending with other fuel oil, meets or is the equivalent of Military Specification Mil-F-859 for Navy Special Fuel Oil and any other more viscous fuel oil, such as No. 5 or Bunker C;

(8) Asphalt-a solid or semi-solid cementitious material which gradually liquefies when heated, in which the predominating constituents are bitumins, and which is obtained in refining crude oil.

(c) Unfinished oils means one or more of the petroleum oils listed in paragraph (b) of this section, or a mixture or combination of such oils, which are to be further processed other than by blending by mechanical means.

[CGFR 63-58, 29 F.R. 15411, Nov. 18, 1964, as amended by CGFR 65-20, 30 F.R. 9979, Aug. 11, 1965]

The clause set forth below shall be inIcluded in all contracts for construction, except those executed on either Standard Form 19 or DD 1155, when any articles, materials, and supplies designated as nondomestic construction materials have been approved for use in connection with the contract pursuant to additional determinations made in accordance with § 11-6.250 and such items will be listed thereunder:

NONDOMESTIC CONSTRUCTION MATERIALS

The requirements of the clause of this contract entitled Buy American Act do not apply to construction materials or their components either included in the list set forth in § 11-6.250 of 41 CFR or as set forth below: (Insert list here)

§ 11-6.204-50 Evaluation of bids and proposals.

(a) Determinations. In accordance with the Buy American Act, the Secretary has determined that where the procedures set forth in paragraph (b) of this section below result in the use of nondomestic construction materials, the use of domestic construction materials would unreasonably increase the cost.

(b) Unreasonable cost. If a bid or proposal is submitted in accordance with paragraph (b) of the provision set forth in § 1-6.204 of this title and if such bid or proposal would be the low acceptable bid or proposal but for the Buy American Act, award will be made on such bid or proposal if all the following conditions are satisfied:

(1) The bid or proposal specifically designates the nondomestic construction materials (not listed as exceptions in the invitations for bids or requests for proposals) for use;

(2) As to each such nondomestic construction material, accompanying data shows that the cost of any available acceptable domestic construction material, delivered at the construction site, would exceed by more than 6 percent the cost of the designated nondomestic construction material delivered at the

construction site (including any applicable duty);

(3) As to each such nondomestic construction material, the contracting officer is satisfied that the showing required by subparagraph (2) of this paragraph is correct as of the date of the opening of bids or proposals; and

(4) The bid or proposal is low after adding, for evaluation purposes, to each bid or proposal 6 percent of the cost of all nondomestic construction materials (delivered at the construction site and including any applicable duty) which are offered in such bid or proposal and which qualify under subparagraphs (1) through (3) of this paragraph.

(c) Impracticability. If a bid or proposal is submitted in accordance with paragraph (b) of the contract clause set forth in § 1-6.204, and if such bid or proposal would be the low acceptable bid or proposal but for the Buy American Act the proposed award shall be submitted, via the Commandant (F) to the Secretary, if the following conditions obtain:

(1) The bid or proposal specifically designates the nondomestic construction materials (not listed as exceptions in the Invitation for Bids or Requests for Proposals) proposed for use; and

(2) As to each such nondomestic construction material, accompanying data shows that it would be impracticable to use domestic construction materials.

§ 11-6.250 List of excepted articles, materials and supplies.

Pursuant to the Buy American Act and § 1-6.202-1, the Secretary has determined that the articles, materials, and supplies listed below may be used in construction without regard to country of origin, except as provided in Subpart 11-6.50 of this part. Additional determinations covering individual procurements will be made in accordance with §11-6.103-2 (c) and (d). If the proposed purchase is excepted from the requirements of the Buy American Act by this section, the contracting officer will prepare a finding stating that the items being purchased are exempted from the provisions of the Buy American Act pursuant to CGPR 11-6.250. The finding will be incorporated into the contractual instrument accomplishing the purchase