R43140 – The Buy American Act in Brief: Preferences for “Domestic” Supplies and Construction Materials in Federal Procurements – 4/26/2016

$19.95

The Buy American Act in Brief: Preferences for “Domestic” Supplies and Construction Materials in Federal Procurements

Description

Author: Kate M. Manuel, Legislative Attorney

Pages: 12

As implemented, the Buy American Act limits the purchase of foreign end products and the use of foreign construction materials by establishing price preferences for domestic offers. Specifically, the provisions of the Federal Acquisition Regulation (FAR) implementing the Buy American Act provide that, when a domestic offer is not the low offer, the procuring agency must add a certain percentage of the low offer’s price to that offer before determining which offer is the lowest priced or “best value” for the government. This percentage generally ranges from 6%, in cases where the lowest domestic offer is from a large business; to 12%, when the lowest domestic offer is from a small business; to 50%, for Department of Defense procurements, although agencies may adopt higher percentages by regulation. If the domestic offer is the lowest, or tied for lowest, after the application of this price preference, the agency must award the contract to the domestic offeror. However, if the foreign offer still has the lowest price, the agency generally awards the contract to the foreign offeror pursuant to provisions of the Buy American Act permitting the purchase of foreign end products when the costs of domestic ones are “unreasonable.”