33 replies to this topic

[ron vogt]

Thank you Outside.  You've answered my original question -- what happens if an agency makes this decision.  The rest is a side issue.

The EECBG Q&A site is only available to registered users, but here are a couple of sample Q&As:

Q: Fluorescent lighting retrofit. We are planning to upgrade lighting throughout 15 schools. The ceiling fixtures will remain in place, but new lamps and ballasts will be installed. The electronic ballasts that we use are made outside the U.S. (as are almost all fluorescent fixture ballasts these days). The fixtures themselves were made in the U.S. May we specify these foreignmade ballasts for use in American fixtures?
A: Yes. The Buy American Act specifically refers to "steel, iron and other manufactured goods" used in the construction, alteration etc of public buildings and public works. We would consider the lighting items as supply items, not construction item. They are therefore acceptable.

Q: We use a brand of LED in our traffic signals that have performed very well and we want to keep buying them. These LEDs are made in Mexico. A previous response stated that there were some "exceptions" to the Buy American requirement for member trade agreement countries. Can you elaborate on this? Would Mexico be one of those exceptions?
A: Mexico itself is not an exception, but the purchase of the LED lights has been determined by our legal counsel to not be covered by the Buy American Provisions. The Buy American Act pertains to iron, steel, and other manufactured goods used in the construction/renovation of public buildings and public works. LED lights have been determined to be supply items; the Provision does therefore not apply.

Q: It has been noted that the purchase of LED lights are exempt under the Buy American provisions. Does the exemption also apply to "cobra head" street lights that use either induction or LED technology?
A: Yes, these can be considered a supply item.

[joel hoffman]

ron vogt, on Jul 27 2009, 05:17 PM, said:

Thank you Outside.  You've answered my original question -- what happens if an agency makes this decision.  The rest is a side issue.

The EECBG Q&A site is only available to registered users, but here are a couple of sample Q&As:

Q: Fluorescent lighting retrofit. We are planning to upgrade lighting throughout 15 schools. The ceiling fixtures will remain in place, but new lamps and ballasts will be installed. The electronic ballasts that we use are made outside the U.S. (as are almost all fluorescent fixture ballasts these days). The fixtures themselves were made in the U.S. May we specify these foreignmade ballasts for use in American fixtures?
A: Yes. The Buy American Act specifically refers to "steel, iron and other manufactured goods" used in the construction, alteration etc of public buildings and public works. We would consider the lighting items as supply items, not construction item. They are therefore acceptable.

Q: We use a brand of LED in our traffic signals that have performed very well and we want to keep buying them. These LEDs are made in Mexico. A previous response stated that there were some "exceptions" to the Buy American requirement for member trade agreement countries. Can you elaborate on this? Would Mexico be one of those exceptions?
A: Mexico itself is not an exception, but the purchase of the LED lights has been determined by our legal counsel to not be covered by the Buy American Provisions. The Buy American Act pertains to iron, steel, and other manufactured goods used in the construction/renovation of public buildings and public works. LED lights have been determined to be supply items; the Provision does therefore not apply.

Q: It has been noted that the purchase of LED lights are exempt under the Buy American provisions. Does the exemption also apply to "cobra head" street lights that use either induction or LED technology?
A: Yes, these can be considered a supply item.

I would agree with Outside that if the action is for supplies, there is no waiver necessary.  However, as I previously stated, I don't agree that these are simply supply actions, if they are to be purchased by a contractor, not the Government, and will be installed under the contract(s).  

As for the answers to the questions, they look to me to be as bad or worse than many of the DAU Ask A Professor Website responses.  There wasn't enough information provided or at least indicated in the publish Q&A to properly answer the questions.  The question didnt mention if  this is an acquisition under the ARRA. The responder appears to have ignored the "maintenance or repair" aspect of the ARRA.  And it appears to me that the responder simply thinks that the organization is buying light bulbs and ballasts.  The question was general and the answer was even more general.  Even if this is a simply a supply action not under the ARRA, the Buy America Act for supplies applies to purchases.  There was no dollar amount identified, indicating whether or not the various Trade Agreements apply.

[Vern Edwards]

Quote

Thank you Outside. You've answered my original question -- what happens if an agency makes this decision. The rest is a side issue.

The statute limits how funds are to "be used." If you spend money to buy something that is to be used for a construction "project," then the statute applies. The limitation does not turn on the nature of the transaction through which the items were purchased. It turns on the use to which funds will be put. If funds are used to buy items to "be used" for a construction "project," whether acquired by the contractor, or by the government and furnished as GFP, then the statutory limitation applies. It does not matter that the contract under which they were bought was a "supply" contract.

But I'm glad ron is content with the answer that he got.

[ron vogt]

I'm content that vern is glad

[joel hoffman]

Thanks to Vern for his clarification that the statute would apply to materials and manufactured goods purchased and used for a public construction project, although it would seem that it also applies to materials used for a maintenance project. Alteration and repair projects are generally types of construction contracts.

[Vern Edwards]

joel hoffman, on Jul 28 2009, 05:55 AM, said:

Thanks to Vern for his clarification that the statute would apply to materials and manufactured goods purchased and used for a public construction project, although it would seem that it also applies to materials used for a maintenance project. Alteration and repair projects are generally types of construction contracts.

The statute applies to expenditures for "projects," not just contracts. It applies to projects for "construction, alteration, maintenance, or repair of a public building or public work... ."

[joel hoffman]

Vern Edwards, on Jul 28 2009, 09:29 AM, said:

The statute applies to expenditures for "projects," not just contracts. It applies to projects for "construction, alteration, maintenance, or repair of a public building or public work... ."

The Q&A responses look poor to me.

[outsidelegalguy]

Note that the Q&A response is consistent with how the Recovery Act has been implemented by the FAR Council in the FAR.  The FAR implements the Buy American provision by adding new clauses to FAR 25.1102, which prescribes when you use clauses in construction contracts, and says that you use the clauses "when using funds appropriated under the Recovery Act for construction . . . ."  FAR 25.1102(e)(1).   The FAR Council did not add any new clauses to 25.1101, which prescribes clauses to be used when acquiring supplies and "the acquisition of services involving the furnishing of supplies."  The FAR thus adopts the "contract type" analysis.  It does not say look to the nature of the project (except, of course, to the extent that determines contract type).

[Vern Edwards]

FAR council implementation aside, here is the relevant language from the statute:

Quote

SEC. 1605. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS. (a) None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.

Emphasis added. The statute limits how Recovery Act money is spent. It says that if Recovery Act money is spent "for a project for the construction, alteration, maintenance, or repair of a public building or public work," then "all of the iron, steel, and manufactured goods used in the project" must be produced in America."

If we do a "plain meaning" reading, then any iron, steel, and manufactured goods the government buys directly with Recovery Act funds, and any that any contractor buys with Recovery Act funds, that will be used for such a project must be produced in America. Moreover, it says that if any of the money is used for a project is Recovery Act money, then all of the iron, steel, and manufactured goods used in the project must be produced in America no matter with what money it is bought.

I know of no other interpretation of the statute.

Now, as for FAR council implementation--if the FAR conforms to the law, then good enough. If it doesn't, then CO's must nevertheless obey the law. See FAR 1.602-1(b). If a CO is found to have violated the law, then the contract funded with Recovery Act money might be found void ab initio and/or the CO might be held responsible for an Anti-Deficiency Act violation.

That's my opinion. Someone tell me how I am wrong.

[outsidelegalguy]

I don't think it's that crystal clear.  Let's say the government's "project" is that it wants to encourage energy efficiency and promote the use of new energy efficient contraptions.  Maybe some will be used in public buildings or public works (a necessity for the statue to apply) and some won't.  It doesn't appropriate any Recovery Act funds for the actual installation (or construction), just the purchase and distribution of the contraption.  So, the project is to purchase them and make them available, not to do the construction, and no Recovery Act money is to be used for the construction.  In that scenario, why would the Buy American provision have to apply?

You interpret the statute as using the term "project" broadly -- in your view, the project isn't what the money is appropriated for.  It's everything that may in some fashion be connected with the project for which the money was appropriated.  That may not be an unreasonable interpretation.  But, it's not necessarily the only one, and courts give regulation writers broad leeway in interpreting the statutes they're supposed to be implementing.  The FAR Council seems to take the more narrow interpretation -- the project is linked to the money.   I don't see how a contracting officer can get in trouble if he implements the statue in the way that the FAR Council says it should be interpreted.

[Vern Edwards]

Quote

Let's say the government's "project" is that it wants to encourage energy efficiency and promote the use of new energy efficient contraptions... It doesn't appropriate any Recovery Act funds for the actual installation (or construction), just the purchase and distribution of the contraption.

The statute limits the "use" of money. Thus, the question is: For what is the money to be "used." If the government buys contraptions in order to give them to someone else so they can use them to make public buildings more energy efficient, then I say that, by the plain language of the statute, the money is being "used for" building alteration projects and that the limit applies. What else is it being used for? The statute does not say that the limit applies only to contracts for construction, etc.

I understand that others may interpret it differently, and I'd be interested in a fully fleshed out affirmative explanation of a different interpretation.

[Don Acquisition]

Vern,

You wrote:

Vern Edwards, on Jul 29 2009, 06:13 AM, said:

Now, as for FAR council implementation--if the FAR conforms to the law, then good enough. If it doesn't, then CO's must nevertheless obey the law. See FAR 1.602-1( b ).

True, but a CO is not authorized to deviate from the FAR without obtaining approval from the agency head (Note that FAR 1.602-1( b ) also requires compliance with regulations).  Are you suggesting that a CO can ignore the FAR because he/she believes that it conflicts with a statute?

[Vern Edwards]

No. I'm suggesting that a CO cannot do something illegal just because the FAR says he can or must. How he handles it is a matter between him and his bosses.

[Whynot]

I was just re-reading this thread and believe that ARRA can fund projects - which can be through grants and/or contracts. FAR deals with contracts and not grants. Perhaps there is no conflict between the statute and FAR. Also, the ARRA invokes the statutes of the BAA in Section 1605, and ?must be implemented in a manner consistent with the United States obligations under international agreements.? Perhaps this section brings in TAA outside of any threshold (construction or supply) - no threshold is mentioned.