§ 1425.203-70 - Evaluating offers and price adjustment proposals.

(a) Upon receipt of an offered foreign construction material, the CO will conduct a 2 part test to determine, first, if the cost of the components made in the U.S. exceeds 50% of the cost for all the components; and second, if the item meets the first test, whether the item is manufactured in the U.S.

(b) The cost of U.S. material is unreasonable if it exceeds the cost of the foreign construction material by more than 6%. The CO will compute the cost of construction material to include all delivery costs to the construction site, and any applicable duty (whether or not a duty-free entry certificate is issued.) This evaluation will be made for each foreign construction material proposed in the offer not excepted by the Government either in the solicitation at 48 CFR 1452.225-70(a) or by subsequent amendment.

(c) The contractor shall pass to the Government any cost savings resulting from post-award approval to use foreign material. The CO may approve exceptions based on cost if the contractor can document that it used U.S. as well as foreign quotes to calculate the price it offered to the Government. If it is shown that the contractor did not obtain the quotes before award, the Director, PAM is authorized to disapprove requests for exceptions to the use of U.S. material. In case of disapproval, the contractor shall use the U.S. material and shall not pass on the additional cost of the U.S. material to the Government.