After award was made the company stating a modification was required to remove the Buy American Act requirement FAR 52.225-01, because the parts are manufactured at their China site. They stated the parts are COTS parts.
My questions is can this clause be removed? If so is there a specific process on completing this request, such as a waiver, or any other details?
This information was not privy prior to award.
Good question, covers a couple of things.
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A phone call with question submitter revealed this item was from PSG 66 (see DFARS 225.401-70) and that the value of the procurement was $28K+. It also was determined the authority to go “sole source” was accomplished appropriately in accordance with FAR 13.105(b) and 13.501(a).
Normally, the process would have revealed that DFARS provision and clause 252.225-7035 and 252.225-7036 (Alternate I) could be used because this procurement is subject to free trade agreements and the only one (due to dollar value) it could be would be Canada under NAFTA. See DFARS 225.1101(9) and (10).
However… this was a small business set-aside as simplified acquisition procedures were being used; see 13.003(b)(1). As a result, trade agreements do not apply [see DFARS 225.401(a)(2)(A)(2) which will lead you to 25.401(a)(1)].
Therefore we would need to include in the solicitation and resulting contract DFARS 252.225-7000 and 252.225-7001.
Luckily, in this scenario, all is not lost! When it comes to determining if a manufactured end product is domestic, there is a two pronged test described at FAR 25.003, which reads:
“Domestic end product” means—
(1) An unmanufactured end product mined or produced in the United States;
(2) An end product manufactured in the United States, if—
(i) The cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic; or
(ii) The end product is a COTS item.
Note: this language is also included in 252.225-7001
In this event, the contractor should certify at 252.225-7000 that their item is a domestic end item because the components from China are COTS. They self-certify and would be committing fraud if they were not being accurate.
So, if you don’t have 252.225-7000 and 7001 in your contract or order, accomplish a modification to replace the FAR clauses (52.225-1 and 52.225-2) with the DFARS p&c referenced above and inform the contractor how to self-certify.