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    What contract clause would be the authority to remove the items: FAR 52.212-4 (c) or 52.225-1. Could you elaborate on 52.225-1; as the definition of domestic product covers COTS. Also, under the clause are the requirements mandatory or suggested in comparison to a trade agreement.


    Answer

    A call to the question submitter revealed this was a FAR 13.303 and not a FAR 8.405-3 BPA. It also revealed that local policy required a modification be done. Finally, it also revealed the BPA was established using the SF1449 (commercial).

    Part1: You should use FAR 52.212-4(c) as the modification authority. FAR 52.225-1 does not include any language that authorizes the Government to modify the contract unilaterally or for the government and contractor to execute a bilateral modification.

    A further discussion on other ways to remove or prevent the items in question from being procured will not be included here.

    To see all of the FAR and DFARS clauses that authorize a modification be made to a contract, check out this awesome tool.

    PART 2: COTS items. FAR 25.003 and FAR 52.225-1(a) provides the definition of a domestic end product:

    Domestic end product means—

       (1) For an end product that does not consist wholly or predominantly of iron or steel or a combination of both-

            (i) An unmanufactured end product mined or produced in the United States;

            (ii) An end product manufactured in the United States, if-

                  (A) The cost of its components mined, produced, or manufactured in the United States exceeds 55 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. Components of unknown origin are treated as foreign. Scrap generated, collected, and prepared for processing in the United States is considered domestic; or

                 (B) The end product is a COTS item; or

    Bold italics added for emphasis.

    The definition of an end product is a little bit different for Trade Agreements. But first, the Trade Agreements Act means that the Buy American Statute may be waived for certain eligible end products (see FAR 25.402(a)(1)).

    Unfortunately, the FAR does not tell us what these certain “eligible products” are nor does your VAAR. You can find out be going to the WTO-GPA Annex 1 Appendix 1 or go to DFARS 225.401-70 (note it is more restrictive for DoD than VA.).

    Finding out what trade agreement applies depends on the dollar value of your action. See the different Trade Agreement thresholds at FAR 25.402(b) Table 1.

    Back to end product definition... see FAR 52.225-5(a) and read the definitions of WTO GPA and Free Trade Agreement country end products; see the paragraphs that discuss “substantial transformation”.

    Luckily it is the contractor that must certify and list what products they are supplying are not domestic or designated country end products (FAR 52.225-6) or foreign end products (FAR 52.225-2).

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