[Federal Register Volume 61, Number 68 (Monday, April 8, 1996)]
[Rules and Regulations]
[Pages 15389-15390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8493]
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DEPARTMENT OF THE INTERIOR
Office of the Secretary
48 CFR Parts 1425 and 1452
RIN 1090-AA55
Department of the Interior Acquisition Regulation; Foreign
Construction Materials
AGENCY: Office of the Secretary, Interior.
ACTION: Final rule.
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SUMMARY: In the interests of streamlining processes and improving
relationships with contractors, the Department of the Interior (DOI) is
issuing this final rule which amends 48 CFR Chapter 14 by revising and
updating the Department of the Interior Acquisition Regulation (DIAR).
EFFECTIVE DATE: May 8, 1996.
FOR FURTHER INFORMATION CONTACT:
Ms. Mary L. McGarvey at (202) 208-3158, Department of the Interior,
Office of Acquisition and Property Management, 1849 C. Street N.W.
(MS5522 MIB), Washington, D.C. 20240.
SUPPLEMENTARY INFORMATION:
A. Background
Under the auspices of the National Performance Review, a thorough
review of the DIAR was conducted. The review revealed unnecessary and
outdated regulations, and some excessively burdensome procedures.
In the interests of streamlining processes and improving
relationships with contractors, essential portions of the DIAR are
being reinvented and retained in 48 CFR, when appropriate. The review
identified Sections that would remain codified. Specifically, Section
1425.203 which reflects the use of a 6% differential to evaluate U.S.
versus foreign construction materials will remain codified. If a U.S.
material exceeds the cost of the foreign product, then the cost of the
U.S. material is unreasonable. Cost savings must be passed on to the
Government in post-award approval to use foreign material. Sections
1425.205 and 1452.225-70 are the prescription and the clause associated
with this DOI policy. We changed titles, rewrote language, and
eliminated redundant FAR material from the Sections. We removed
Secs. 1425.202 and 1425.204 from 48 CFR Chapter 14 under another final
rule published in the Federal Register dated 2/13/96.
This final rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because
contractors are required to either comply with the Buy American Act or
seek exceptions. An Initial Regulatory Flexibility Analysis has,
therefore, not been performed.
Paperwork Reduction Act
As required by the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)), the Department has received approval for this collection of
information, with approval number 1090-0018, with the expiration date
of September 30, 1988. The Paperwork Reduction Act applies because the
proposed revisions impose additional recordkeeping requirements or
information collection requirements or collection of information from
offerors, contractors or members of the public which require the
approval of the Office of Management and Budget (OMB) under 44 U.S.C.
3501 et seq. The rule requires contractors proposing to use foreign
construction materials to submit information on foreign and domestic
construction materials, as well as a justification for use of foreign
material. This information will be evaluated by the government in
determining if a request for a waiver of the Buy American Act should be
granted.
Annual Reporting Burden
Public reporting burden for this collection of information is
estimated to average 1 hour, including examination of all bids received
to see if foreign materials are proposed and an additional burden of
applying the differential and comparing costs.
It is estimated that the information collection would affect 250
contractors (50 applicable contractors x 5 average bidders per
contract). The amount of time required for each respondent to provide
the required information would not exceed 1 hour, thus 250 burden
hours.
Required Determinations: The Department believes that public
comment is unnecessary because the revised material implements standard
Government operating procedures. Therefore, in accordance with 5 U.S.C.
553(b)(B), the Department finds good cause to publish this document as
a final rule. This rule was not subject to Office of Management and
Budget
[[Page 15390]]
review under Executive Order 12866. In accordance with the Regulatory
Flexibility Act (5 U.S.C. 601 et seq), the Department has determined
that this rule will not have a significant economic impact on a
substantial number of small entities because minimal requirements are
being added for small businesses and no protections are being
withdrawn. The Department has determined that this rule does not
constitute a major Federal action having a significant impact on the
human environment under the National Environmental Policy Act of 1969.
The Department has certified that this rule meets the applicable
standards provided in Sections 2(a) and 2(b)(2) of Executive Order
12778.
List of Subjects in 48 CFR Parts 1425 and 1452
Government procurement, Reporting and recordkeeping requirements.
Dated: March 15, 1996.
Bonnie Cohen,
Assistant Secretary--Policy, Management and Budget.
Chapter 14 of Title 48 of the Code of Federal Regulations is
amended as follows:
1. The authority citation for 48 CFR parts 1425 and 1452 continues
to read as follows:
Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5
U.S.C. 301.
2. 48 CFR part 1425 is revised to read as follows:
PART 1425--FOREIGN ACQUISITION
Supart 1425.2--Buy American Act--Construction Materials
Sec.
1425.203-70 Evaluating offers and price adjustment proposals.
1425.205 Solicitation provision and contract clause.
Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5
U.S.C. 301.
Supart 1425.2--Buy American Act--Construction Materials
Sec. 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.
Sec. 1425.205 Solicitation provision and contract clause.
In addition to using the clauses required in FAR 25.205, the CO
will insert the clause at 48 CFR 1452.225-70, Use of Foreign
Construction Materials--Department of the Interior, in solicitations
and contracts for construction, alteration, or repair inside the U.S.
If the Government has determined that a U.S. construction material is
unavailable, it will be listed under paragraph (a) of the clause.
3. Section 1452.225-70 is revised to read as follows:
Sec. 1425.225-70 Use of Foreign Construction Materials.
As prescribed in 48 CFR 1425.205, insert the following clause in
solicitations and contracts for construction, alteration, or repair
inside the United States:
Use of Foreign Construction Materials--Department of the Interior (APR
1996)
(a) The Government has determined that the Buy American Act is
not applicable to the following construction materials because they
are not mined, produced, or manufactured in the U.S. in sufficient
quantities of a satisfactory quality:
(1)--------------------------------------------------------------------
(2)--------------------------------------------------------------------
(3)--------------------------------------------------------------------
(b) Offers based on the use of foreign construction materials
other than those listed in (a) above may be acceptable if the
Government determines that U.S. construction material is not
available, would be impracticable or constitute unreasonable price.
Please contract the Contracting Officer with questions or comments
concerning non-availability or impracticability of U.S. material.
(c)(1) Offers based upon use of foreign construction material
for cost savings will be considered reasonable if the cost of each
foreign construction material, plus 6 percent, is less than the cost
of comparable U.S. construction material. The Contracting Officer
will compute the cost of each foreign 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 included in the offer but not listed in subparagraph (a)
above in this clause.
(2) Any contractor cost savings from post award approved
substitution of foreign construction material for U.S. construction
material shall be passed to the Government.
(d)(1) This offer is based on the use of foreign construction
material not listed in (a) above. For each foreign item proposed the
offeror shall furnish the following information for the foreign
material offered: item description, supplier, unit of measure,
quantity, unit price, duty (even if a duty free certificate is
issued), delivery costs, and total price. The offeror shall furnish
the following information for each U.S. material comparable to the
foreign material: item description, supplier, unit of measure,
quantity, unit price, delivery costs and total price.
(2) If the Government rejects the use of foreign construction
material listed under paragraph (d)(1) above, the Government will
evaluate the offer using the offeror's stated price for the
comparable U.S. construction material, and the offeror shall be
required to furnish such domestic construction material at the
originally offered price. In preaward situations, an offer which
does not state a price for a comparable U.S. construction material
will be rejected by the Government. In postaward situations an offer
proposing foreign material which does not state the price for the
comparable U.S. construction material will be rejected by the
Government. The contractor shall use comparable U.S. material for
the project and any additional cost for the use of this U.S.
material shall be absorbed by the contractor.
(End of clause)
[FR Doc. 96-8493 Filed 4-5-96; 8:45 am]
BILLING CODE 4310-RF-M
