Overview
This section prescribes the procedures for offerors to request a preaward determination that the Buy American statute or the Recovery Act does not apply to specific construction materials due to unreasonable costs. It establishes the specific price comparison thresholds that contracting officers must use to justify an exception to domestic preference requirements.
Key Rules
- Request Timing and Data: Offerors must submit requests for exceptions following the specific timing and documentation requirements found in solicitation clauses FAR 52.225-21 through 52.225-24.
- Mandatory Evaluation: The contracting officer is required to evaluate all requests before award and may use outside information to supplement the offeror's data.
- Manufactured Material Threshold: For manufactured construction materials, the cost is considered "unreasonable" if using domestic materials would increase the overall offered price of the contract by more than 25 percent.
- Unmanufactured Material Threshold: For unmanufactured construction materials, the cost is considered "unreasonable" if the cost of the domestic material exceeds the cost of foreign material by more than 20 percent.
Practical Implications
- Contractors must perform detailed cost analyses during the bidding phase to identify if domestic materials meet the "unreasonable cost" criteria, as these requests must generally be settled before the contract is awarded.
- The regulation creates a significant distinction in how price hikes are calculated: manufactured materials are judged against the total contract value, while unmanufactured materials are judged on a unit-cost basis.