Buy American Act

The Buy American Act in general, Restricts the purchase of supplies, that are not domestic end products, for use within the United States.

If you have a question or doubt about the "Buy American Act Clause in a contract, Do not hesitate to contact The Procurement Officer and clear it up by text or e-mail and keep a record.
Working with DCMA over the years the conclusion is -  It is Confusing

"2017 - Buy American Act is a big deal within Defense Contract Management Agency (DCMA).

Companies and People are going to legal and investigations are going on all over the industry with Fines and/or Jail."

One of the biggest mis-perceptions about the Buy American Act is that it forces the government to "buy American."
This may not be the case in all contracts.

Always ask the Procurement Office in Charge of the Government contract if you have any questions concerning the Buy American Act in the solicitation.

The Buy American Act imposes a two-part test:

(1) The end-product must be manufactured in the United States, and

(2) more than 50 percent of the cost of all the component parts must also be manufactured in the United States.
If a product meets this two-part test, then a product can be considered a "domestic end product" under the Buy American Act.

But the DOD issued a final rule amending the DFARS 252.225-7000 and 252.225-7001 provision and clause which includes a partial waiver to the two-part test.
The waiver allows a commercial off-the-shelf (COTS) item to be treated as a domestic end product if it is manufactured in the U.S., without tracking the origin of the item’s components.
Exceptions that allow the purchase of a foreign end product are listed at FAR 25.103 and DFARS 225..
Under certain conditions, federal and/or DoD procurements may be waived:

Public Interest:
The head of the agency determines that a domestic preference would be inconsistent with the public interest. This exception applies when an agency has an agreement with a foreign government that provides a blanket exception to the Buy American Act.
DoD currently has the following agreements:
World Trade Organization Government Procurement Agreement (WTO GPA), Free Trade Agreements (FTAs) with various countries (including Caribbean Basin Trade Initiative (CBTI)), Memorandum of Understandings (MOUs) with Qualifying Countries listed in DFARS 225.872 and North American Free Trade Agreement (NAFTA).

Non-availability:
The statute does not apply with respect to articles, materials, or supplies not mined, produced, or manufactured in the U.S. in sufficient and reasonable available commercial quantities and of a satisfactory quality. FAR 25.104 and DFARS 225.104 list articles determined to be non-available.

Unreasonable Costs.
If purchasing the material domestically would burden the government with an unreasonable cost. The unreasonable cost exception is implemented through the use of an evaluation factor applied to low foreign offers. The Contracting Officer may determine unreasonable cost in accordance with FAR 25.105 / Subpart 25.5 and DFARS 225.105 / Subpart 225.5.

Resale.
The contracting officer may purchase foreign end products specifically for commissary resale.

Information Technology that is a commercial item.

Confusion:
Applying country of origin (COO) rules to federal government contracts can be confusing even to experienced government contracting professionals. This confusion is due in significant part to the contradictory goals of domestic preference laws on the one hand, and international free trade agreements (FTAs), on the other hand.
If you have a question about the "Buy American Act Clause in a contract, Do not hesitate to contact The Procurement officer and clear it up by text or e-mail and keep a record.

A foreign end product may be purchased if the contracting officer determines that the price of the lowest domestic offer is unreasonable or if another exception applies.
(see FAR Subpart 25.1)

The restrictions in the Buy American Act are not applicable in acquisitions subject to certain trade agreements."
(see FAR Subpart 25.4).

End products and construction materials from certain countries receive nondiscriminatory treatment in evaluation with domestic offers.

Generally, the dollar value of the acquisition determines which of the trade agreement applies.

Exceptions to the applicability of the trade agreements are described in Subpart 25.4.

The test to determine the country of origin for an end product under the Buy American Act (see the various country “end product” definitions in 25.003) is different from the test to determine the country of origin for an end product under the trade agreements, or the criteria for the report on end products manufactured outside the United States (see 25.004).

Under the trade agreements, the test to determine country of origin is “substantial transformation”

For the reporting requirement at FAR Subpart 25.004, the only criterion is whether the place of manufacture of an end product is in the United States or outside the United States, without regard to the origin of the components.

When using funds appropriated under the American Recovery and Reinvestment Act of 2017 (Pub. L. 111-5), the definition of “domestic manufactured construction material” requires manufacture in the United States but does not include a requirement with regard to the origin of the components.

If the construction material consists wholly or predominantly of iron or steel, the iron or steel must be produced in the United States.

All vendors and subcontractors providing material to Government agencies which include the "BUY AMERICAN ACT" must adhere to FAR's contained in the contract.

The Buy American Act does not necessarily mean you have to buy in America.

The Buy American Act restricts the purchase of supplies that are not domestic end products it uses a two-part test to define a domestic end product . The two tiered test under the Buy American Act is listed in FAR 25.1.

The article must be manufactured in the United States and

The cost of domestic components must exceed 50 percent of the cost of all the components. In accordance with 41 U.S.. 431. this component test of the Buy American Act has been waived for acquisitions of Commercially available off-the-shelf (COTS) items.
see 12.505(a)

The Buy American Act provides that the Government give preference to domestic construction material.

The Buy American Act has separate provisions for supply contracts and construction contracts and applies to small business set-asides.

The text of Buy American Act can be accessed here:
Material and equipment conforming to the Buy American Act Refer to FAR 25.1 and DFARS25.1225.1

When you fill out you ORCA certifications, or if the Solicitation contains Section L;
Offeror Representations and Certifications, you will list materials and certify as manufactured in the USA.

Please refer to DFAR Subpart 225.872-1 which states that it is inconsistent with public interest to apply restrictions of the Buy American Act to the acquisition of defense equipment which is mined, produced or manufactured in the below designated countries.

The Buy American Act was passed by U.S. Congress in 1933.

The purpose of the Buy American Act is to provide preferential treatment for domestic sources of unmanufactured articles, manufactured goods, and construction material for public use unless a specific exemption applies.

The act requires the federal government to purchase domestic supplies for use in the United States, if:

The supply contract exceeds the micro-purchase threshold; or

The supply portion of a contract for services that involves the furnishing of supplies exceeds the micro-purchase threshold. In determining what are domestic goods, the place of mining, production, or manufacture is controlling.

Remember to always ask the Procurement Office in Charge of the Government contract if you have any questions concerning the Buy American Act in the solicitation.

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Buy American Act.

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Government Contracts

The Buy American Act—Preferences for “Domestic” Supplies: Congressional Research Service,

A Brief by Kate M. Manuel Legislative Attorney April 26, 2017

Staying in Compliance of the "Buy American Act.

Office of the United States Trade Representative

Keeping up with changes to
the Federal Acquisition Regulation (FARs)

The American Recovery and Reinvestment Act of 2017

The U.S. Department of Transportation's Launches Buy America Website

Agreement on Government Procurement

World Trade Organization

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