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  • Question

    We believe the leasing of this magnitude would be a capital lease but can't seem to find a definitive answer on if BAA applies. We are particularly interested because the infrastructure to support the charging of the leased vehicles (separate construction procurement) will be subject to BAA. Do you know the answer or have suggestions?


    Answer

    Summary
    The Buy American Act (BAA) places restrictions on “articles, materials, and supplies” “acquired for public use” (see 41 U.S.C. §8302(a)).  Further, the Comptroller General has expressed an interpretation that the BAA applies to leases, as well as purchases ( see Matter of: National Office Equipment Company, B-191003, dated June 6, 1978, citing 46 Comp. Gen. 47 (1966) as precedent).   Based on the language of the BAA and the interpretation by the Comptroller General, it seems the leasing of 300 to 600 electric vehicles would be subject to possible BAA restrictions (unless, of course, it were made exempt by some other statute, regulation, trade agreement, or treaty the acquisition is also subject to).
     
    Discussion
    Analysis to determine whether or not the “leas[ing] of 300 to 600 electric vehicles” is subject to the Buy American Act might require further information and analysis but the analysis might also reasonably progress in the manner discussed below.
     
    The BAA is currently codified in the United States Code at 41 U.S.C § 8302.  The BAA places restrictions on “articles, materials, and supplies” “acquired for public use” (see 41 U.S.C §8302(a)(1)).  On its face, at least arguably, the “leas[ing] of 300 to 600 electric vehicles” would appear to require consideration of the BAA, as presumably the subject vehicles are articles or supplies and they are acquired for public use.  There are exceptions provided for in the BAA itself (see 41 U.S.C §8302(a)(2)).  Generally the section does not apply:
     
    “(A) to articles, materials, or supplies for use outside the United States;
     
    (B) if articles, materials, or supplies of the class or kind to be used, or the articles, materials, or supplies from which they are manufactured, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and are not of a satisfactory quality; and
     
    (C ) to manufactured articles, materials, or supplies procured under any contract with an award value that is not more than the micro-purchase threshold under section 1902 of this title.”
     
    The question posed states that the subject vehicles are for use in California, so exception (A) above does not appear to be present.  The existence or not of the conditions cited in exception (B) above are not clearly obvious and so might need to be further determined.  Finally, the acquisition value of the contemplated acquisition of subject vehicles is not stated, but the applicability of exception (C) above seems unlikely presuming that “300 to 600 electric vehicles” are valued at more than the micro-purchase threshold (currently $3,000).   If the conditions stated in the above exceptions are found to be present, the BAA must be considered.
     
    Furthermore, the Comptroller General has opined that the BAA applies to leases, as well as purchases ( see Matter of: National Office Equipment Company, B-191003, dated June 6, 1978, citing 46 Comp. Gen. 47 (1966) as precedent).
     
    In conclusion, based on the language of the BAA and the interpretations of such by the Comptroller General, it is reasonable to conclude that the lease of 300 to 600 electric vehicles would be subject to the BAA.

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