I hear ya. I'm not sure about a deviation. I think there will further discussion of the matter before deciding how to proceed. I do agree that it's probably less risky to include the clause based on the strict reading of the prescription, and forget the apparent inconsistency of the prescription with FAR 25.4. I'm just not sure that doing so is consistent with the intent of the law - but then I begin to veer off the narrow path of strict interpretation into constructionism and spirit of the law good intentions stuff that the road to perdition is paved with...

Too bad FAR 1.401(a) doesn't account for inconsistencies within the FAR itself - like the prescription being inconsistent with a subpart.

I think I have the beginning of a solution.  But, it is late in the day, and I don't have the time or brain power to follow all the threads.  But, if someone else wants to, have at it.  Otherwise, I may give it another look tomorrow. 

Subpart 25.4 primarily deals with the application of the Trade Agreements Act (19 U.S. Code Chapter 13).  The Trade Agreements Act does not apply to small business set asides (19 U.S.C. § 2511(f)), and so that exception is properly noted at FAR 25.401(a)(1).

Why then would FAR 25.1102 not include the TAA exception for small businesses?  Well, despite the fact that 52.225-11 has the words Trade Agreements in its name, it is not implementing the Trade Agreements Act.  The clause expressly states, "This clause implements 41 U.S.C. chapter 83, Buy American, by providing a preference for domestic construction material."  So, 25.1102 is implementing provisions of the Buy American Act, which does apply to small business set asides.  That is why there is no exception.

 

3 hours ago, Lionel Hutz said:

 

Why then would FAR 25.1102 not include the TAA exception for small businesses?  Well, despite the fact that 52.225-11 has the words Trade Agreements in its name, it is not implementing the Trade Agreements Act.  The clause expressly states, "This clause implements 41 U.S.C. chapter 83, Buy American, by providing a preference for domestic construction material."  So, 25.1102 is implementing provisions of the Buy American Act, which does apply to small business set asides.  That is why there is no exception.

 

Why do you think that because the clause says that it's implementing the Buy American Act, it is not implementing the Trade Agreements Act? Why can't it be implementing both? The Trade Agreements Act clearly applies to construction material and there is no other FAR clause that implements that policy for construction. The Trade Agreements Act requires agencies to waive the restrictions of the Buy American Act for construction material from Free Trade Agreement countries and WTO GPA countries. That's what the clause provides for, right?

3 hours ago, Lionel Hutz said:

The Trade Agreements Act does not apply to small business set asides (19 U.S.C. § 2511(f)), and so that exception is properly noted at FAR 25.401(a)(1).

@Lionel HutzHere's 19 U.S.C. 2511(f):

Quote

(f)Small business and minority preferences

The authority of the President under subsection (a) of this section to waive any law, regulation, procedure, or practice regarding Government procurement does not authorize the waiver of any small business or minority preference.

I don't think that says what you indicated it says.

As noted by others my mission is to understand and apply.  My final thoughts after reading and re-reading are -

18 hours ago, ji20874 said:

that entire subpart is and only works for supply contracts, not construction contracts. 

You continually quote "only applies to supply contracts".   However is your read is too narrow?   Most specifically this or similar is found throughout 25.1 "The supply portion of a contract for services" (my emphasis added).   I would further offer applying the definitions of the FAR with regard to "construction" and "supply" would seem not to apply in the case of FAR 25.   What does apply is "domestic construction material" and "domestic end product" do.  Or in other words could a construction contract be a "service" contract that has a "supply portion"?

Case in point, you say -

18 hours ago, ji20874 said:

FAR 52.225-6 is not included in a contract for construction in the U.S. -- it is not prescribed in FAR 52.1102.

Yet the leading general prescription found at 25.1101 where 52.225-6 is prescribed says - "The following provisions and clauses apply to the acquisition of supplies and the acquisition of services involving the furnishing of supplies ." Again my emphasis added.

Further 25.1102 while referencing construction in general does get more specific by referencing "construction materials".

I do not believe it is a stretch to think that a construction contract can have both "construction materials" - (again emphasis added)

"Construction material means an article, material, or supply brought to the construction site by a contractor or subcontractor for incorporation into the building or work . The term also includes an item brought to the site preassembled from articles, materials, or supplies . However, emergency life safety systems, such as emergency lighting, fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building or work and that are produced as complete systems, are evaluated as a single and distinct construction material regardless of when or how the individual parts or components of those systems are delivered to the construction site. Materials purchased directly by the Government are supplies , not construction material ."

And  "end product" -

"End product means those articles, materials, and supplies to be acquired for public use."

And just to add complication.  In 25.401 it discusses at (d) "services" excluded from FTA and 'dredging" is list yet at FAR Part 2 "dredging" is defined as "construction."

Does not your expressed narrow read of "supply"  not meet what I will call the final test where you say -

18 hours ago, ji20874 said:

That evaluation for supply contracts compares offers, occurs after receipt of proposals, and decide the winner.  The evaluation for construction contracts contemplated by FAR 52.225-11(c) occurs before receipt of proposals, does not involve comparing proposals, and does not decide the winner.

By my read it does not.   First the contractor may request use of foreign material and such material would be evaluated based on in part - an exception to the BAA.  FTA is an exception so evaluation and determination is made both pre and post solicitation and award as well.  In construction I would agree it does not decide a winner but it does decide if the material can be used under the contract either BAA compliant and if not then FTA compliant.   

18 hours ago, ji20874 said:

My Summary:  I believe it would be grievous error for a contracting officer to issue a solicitation or award a contract for construction in the U.S. over the threshold without the clause at FAR 52.225-11, using as argument that the procurement is a set-aside.   Think about it, MileHighAcq or others -- if this is your argument, what clause will you use?

This I agree with.  But I believe the "stay in the lane" analogy is misplaced..   BAA applies to all contracts over the micro-purchase threshold.  That is one lane.  FTA supersedes BAA in some cases for example a construction contract above $7,032,000, which is another lane applicable to construction.  Set aside for small business, excluded from FTA and only BAA applies, which I might call another lane.  So it seems it pans out like this with the "canned" determination that BAA is waived for FTA designated country materials in FAR 52.225-11.

Set-aside or not - contractor can not use post award a foreign material but can ask for it to be approved pre/post award.   

Set-aside - FTA does not apply and the material is only evaluated using BAA criteria. 

Not set-aside - CO uses criteria of FTA to determine acceptability. 

And then I will throw this out that during contract administration the CO, via inspection, has the post award ability to inspect and evaluate all material pursuant to 52.225-11. 

 

1 hour ago, C Culham said:

Set-aside - FTA does not apply and the material is only evaluated using BAA criteria. 

I added the emphasis because my question is, how is this accomplished for construction material over $7,032,000 that is set aside for small business concerns? Under what clause is this accomplished?

Here is my basic message for WIFCON readers--

• For supplies:  Use FAR subpart 25.1 and the prescriptions in FAR 25.1101.
• For construction:  Use FAR subpart 25.2 and the prescriptions in FAR 25.1102.
• Do not mix.

I believe it would be grievous error for a contracting officer to issue a solicitation or award a contract for construction in the U.S. over the threshold without the clause at FAR 52.225-11, using as argument that the procurement is a set-aside. 

Other WIFCON contributors may disagree with some or all of the above.  It appears some are okay with mixing, including both sets of clauses (from FAR 25.1101 and 25.1102) in the same contract.  Some are okay with dropping the clause at FAR 52.225-11 in construction contracts over the threshold.  I advise against both, but WIFCON readers have to make their own decisions.  That's the benefit of WIFCON -- different perspectives from different people.

I always hope that WIFCON readers will also read the relevant FAR text, and allow the WIFCON discussions to inform their own readings of the FAR text.

20 hours ago, MileHighAcq said:

Our solicitor's opinion was to use 52.225-9 in lieu of 52.225-11 when the procurement is set aside for small business concerns.

@MileHighAcqYour "solicitor" (are you British?) has developed a faulty opinion. The proper clause to use in acquisitions valued at more than the $7,032,000 trade agreements threshold is FAR 52.225-11, as prescribed by FAR 25.1102(c). I will explain.

Everyone-

There is no conflict between FAR 25.401(a)(1) and FAR 52.225-11, which implements the Buy American Act.

The Buy American Act, which applies to supply and construction procurements, requires the use of domestic construction materials, but provides for exceptions. See 41 USC 8303(b).

FAR 52.225-11 is the product of the 1999 "FAR Part 25 Rewrite," FAC 97-15, 64 FR 72416-01, Dec. 27, 1999. It implements the Buy American Act by requiring the use of domestic construction materials, but grants a blanket exception for construction materials from countries with trade agreements. The key language in the clause is this:

Quote

In addition, the Contracting Officer has determined that the WTO GPA and Free Trade Agreements (FTAs) apply to this acquisition. Therefore, the Buy American restrictions are waived for designated country construction materials.

Before the FAR Part 25 Rewrite, the construction clause was FAR 52.225-15, Buy American Act-Construction Materials Under Trade Agreements Act and North American Free Trade Agreement (JUN 1997). It imposed the Buy American Act on construction acquisitions. It also established an arduous procedure whereby an offeror or contractor could apply to the contracting officer for an exception allowing the use of materials from nations with U.S. trade agreements. Here is the procedure for contractors:

Quote

(c) Request for determination.

(1) Contractors requesting to use foreign construction material under paragraph (b)(4) of this clause shall provide adequate information for Government evaluation of the request for a determination regarding the InapplicabilIty of the Buy American Act. Each submission shall include a description of the foreign and domestic construction materials, including unit of measure, quantity, price, time of delivery or availability, location of the construction project, name and address of the proposed contractor, and a detailed justification of the reason for use of foreign materials cited In accordance with paragraph (b)(4) of this clause. A submission based on unreasonable cost shall include a reasonable survey of the market and a completed price comparison table in the format in paragraph (d) of this clause. The price of construction material shall include all delivery costs to the construction site and any applicable duty (whether or not a duty-free certificate may be issued).

(2) If the Government determines after contract award that an exception to the Buy American Act applies, the contract shall be modified to allow use of the foreign construction material, and adequate consideration shall be negotiated. However, when the basis for the exception is the unreasonable price of a domestic construction material, adequate consideration shall not be less than the differential established in paragraph (b)(4)(1) of this clause.

(3) If the Government does not determine that an exception to the Buy American Act applies, the use of that particular foreign construction material will be a failure to comply with the Act.

A separate procedure for offerors is prescribed in the solicitation provision at FAR 52.225-10(b).

Apparently, individual requests for exceptions in large construction procurements had become common. So rather than process numerous individual requests for Buy American exceptions, the FAR Part 25 Rewrite did away with all that by creating the FAR 52.225-11(b)(1) blanket exception that we now know and love.

In short, what FAR 52.225-11(b)(1) does is allow companies to use construction materials obtained from countries with U.S. trade agreements ("designated" countries) in procurements valued at more than $7,032,000 without having to apply for an exception. FAR 52.225-11(c) prescribes a procedure for requesting an exception for materials from other foreign countries.

So what about FAR 25.401(a)(1)?

The Buy American Act and small business set-asides are considered discriminatory trade practices. In 1978-79, members of the World Trade Organization (WTO) negotiated the "Tokyo Round" Agreement on Government Procurement (AGP). The signatories to the WTO/AGP agreed not to apply discriminatory practices to foreign trade partners. The Trade Agreements Act approved the president's agreement to the WTO/AGP. The Trade Agreement Act is a set of exceptions to the Buy American Act, and is implemented by FAR Subpart 25.4

The U.S. appendix to the WTO/AGP provided that the agreement would not prohibit the use of small and minority business set-asides. That is the basis for FAR 25.401(a)(1). But FAR 25.401(a)(1) does not prevent the government from allowing exceptions to the Buy American Act and allowing purchases of materials from foreign trade partners when domestic products are unavailable or too costly, so there are exceptions. Thus, FAR 52.225-11(b)(1).

The bottom line is:

1. You cannot understand FAR 25.401(a)(1) without some background.
2. FAR 52.225-11 must be used as prescribed by FAR 25.1102(c). 

(A fun fact: When FAR was published in 1984, 52.225-11 was named "Certain Communist Areas.")

I traveled a tortuous, hours-long path of research to dig up and polish the above nugget. I had to condense a lot of information in order to fit it into a reasonably brief post. I don't like writing long stuff in this online forum, but I don't think I made any big mistakes. Hopefully, this post is clear enough to settle the debate.

During the course of my research I downloaded well over one thousand pages of historical documents. I learned lot about the history of the Trade Agreements Act. Thank goodness for the internet.

I don't sleep much, and it has worried me. But, sometimes, it has its rewards. I get in lots of reading. Please remember me fondly after Alzheimers sets in.

Thanks Vern. The time and effort you expended researching, reading, logic-applying and trying to make sense of it all, and condensing it into a reasonably short post is appreciated!

46 minutes ago, Vern Edwards said:

@MileHighAcqYour "solicitor" (are you British?)

p.s. not British, but that what our legal is called at DOI "Office of the Solicitor".

16 hours ago, Don Mansfield said:

The Trade Agreements Act requires agencies to waive the restrictions of the Buy American Act for construction material from Free Trade Agreement countries and WTO GPA countries. That's what the clause provides for, right?

Well, Vern clearly did a deeper and more comprehensive dive than I did.   But, to answer your specific question here, I will just note that the TAA does not require agencies to waive the restrictions of the BAA. Rather, the TAA authorizes the president to waive all discriminatory purchasing requirements, including the BAA but not small business or minority restrictions, that affect eligible products.  FAR Subpart 25.4 implements the TAA, and it states it does not apply to small business set-asides. 

However, there is nothing prohibiting the government from relying on different statutory authority to waive all or part of the BAA.  And, in this case, the BAA itself authorizes the government to waive its requirements in some circumstances.  See 41 U.S.C. § 8303(b)(3).  This is an authority separate and apart from the TAA waiver authority.  If you look at the text of 52.225-11, you will see the exceptions that it authorizes are based on the waiver language of the BAA statute and the exceptions listed at FAR 25.202, which is in Subpart 25.2 - Buy American-Construction Materials.

 

 

@Lionel Hutz

 

1 hour ago, Lionel Hutz said:

I will just note that the TAA does not require agencies to waive the restrictions of the BAA. Rather, the TAA authorizes the president to waive all discriminatory purchasing requirements, including the BAA but not small business or minority restrictions, that affect eligible products.  FAR Subpart 25.4 implements the TAA, and it states it does not apply to small business set-asides. 

The relevant text of the Trade Agreements Act is in 19 USC § 2511(f):

Quote

(f) Small business and minority preferences

The authority of the President under subsection (a) of this section to waive any law, regulation, procedure, or practice regarding Government procurement does not authorize the waiver of any small business or minority preference.

Next

1 hour ago, Lionel Hutz said:

FAR Subpart 25.4 implements the TAA, and it states it does not apply to small business set-asides. 

FAR 25.401(a)(1) says:

Quote

This subpart does not apply to—(1)Acquisitions set aside for small businesses[.]

What does that mean?

It must mean that under a set-aside the CO need not do the things required and need not refrain from doing the things prohibited. I cannot think of what else it could mean. So, what does the subpart require and prohibit? What are the shalls and shall nots that do not apply to set-asides.

There are nine sections within Subpart 25.4—25.400 through 25.408.

(1) 25.400 states the scope of the part. It neither requires nor prohibits anything.

(2) 25.401 lists exceptions and services excluded from the WTO/GPA.

(3) 25.402(a)(2) says that the CO must determine the origin of services by country in which the firm providing the services is established.

(4A) 25.403(a) explains a couple of things but does not say that anyone shall or shall not do anything.

(4B) 25.403(b) explains the application of dollar thresholds.

(4C) 25.403(c) says to acquire only U.S.-made or designated country end products or services unless no offers are received or the offers are insufficient.

(5) 25.404 says that for certain acquisitions construction materials and services must be treated as end products.

(6) 25.405 says certain construction materials and services must be treated as end products.

(7) 25.406 says that certain agencies must evaluate Israeli offers without regard to Buy American restrictions/

(8) 25.407 says that the Trade Representative has waived Buy America statute for civil aircraft.

(9) 25.408(a) specifies certain procedures the CO must follow when the WPO/GPA applies: (1) and (2)synopsize, (3) not include technical requirements designed to preclude acquisition of eligible products, (4) state the offers must be in English and in U.S. dollars, (5) notify unsuccessful offerors as required by FAR. It refers readers to FAR Subpart 25.5 for evaluation procedures.

So that's it. That's all that does not apply to small business set-asides.

How about we move on from FAR 25.401(a)(1).

 

1 hour ago, Vern Edwards said:

So that's it. That's all that does not apply to small business set-asides.

The TAA only “does” 2 things: 
1) It authorizes the president to waive the BAA, (19 U.S.C. § 2511), and
2) It imposes its own set of restrictions by authorizing the president to bar procurement from non-designated countries. (19 U.S.C. § 2512(a))
Everything else are the details about how that happens and various exceptions.

24.402(a)(1) is the FAR implementation of the waiver of the BAA’s requirements.

25.403(c) is the FAR implementation of the TAA baring procurements from non-designated countries.

So, when FAR 25.401(a)(1) states that that entire subpart 25.4 (including the two provisions I highlighted above) does not apply to small business set-asides, it is saying that the regulations that implement the TAA’s waiver and restrictions do not apply.

You say “that’s it” as if that is not a lot. But, that is literally everything the TAA does.

1 hour ago, Vern Edwards said:

How about we move on from FAR 25.401(a)(1).

I agree.  If all we are doing is looking at FAR 25.1102 and FAR Clause 52.225-11, which was the original question, then there is no need to worry about FAR 25.401(a)(1).  FAR Clause 52.225-11 implements BAA requirements and waivers under BAA authority.  It has nothing to do with the TAA or FAR 25.401(a)(1).  This what I said last night.  Don suggested the clause could implement both the TAA and the BAA.  I disagree. The clause only references the BAA and the language of the clause directly calls back to the BAA statute and BAA regulations in Subpart 25.2.

@Lionel:

I agree with your analysis of the TAA and I agree that 52.225-11 clause implements the BAA. I don't think think FAR 25.401(a)(1) has anything to do with it. But most importantly, I agree with ji20874 that the right thing to do is comply with FAR clause prescriptions.

4 minutes ago, Vern Edwards said:

@Lionel:

I agree with your analysis of the TAA and I agree that 52.225-11 clause implements the BAA. I don't think think FAR 25.401(a)(1) has anything to do with it. But most importantly, I agree with ji20874 that the right thing to do is comply with FAR clause prescriptions.

I agree a KO should comply with the FAR clause prescription as well.  We are in agreement all around.

7 hours ago, Lionel Hutz said:

 Don suggested the clause could implement both the TAA and the BAA.  I disagree.

What do you think implements trade agreements in construction contracts?

8 hours ago, Don Mansfield said:

What do you think implements trade agreements in construction contracts?

52.225-11 

There is a difference between trade agreements and the Trade Agreements Act.  Trade agreements can be implemented in a number of different ways.  The TAA is one of them.  However, trade agreements can also be implemented under the BAA.

The BAA (at 41 U.S.C. 8303) provides that construction contracts must use domestic construction materials.  However, it also provides as an exception the following: "This section does not apply - ... (B) to any articles, materials, or supplies procured pursuant to a reciprocal defense procurement memorandum of understanding (as described in section 8304), or a trade agreement or least developed country designation described in subpart 25.400 of the Federal Acquisition Regulation."

If you look at the language of 52.225-11, it states, "In addition, the Contracting Officer has determined that the WTO GPA and Free Trade Agreements (FTAs) apply to this acquisition. Therefore, the Buy American restrictions are waived for designated country construction materials."

The BAA itself allows for the exception found in the WTO GPA, and the clause then implements that exception in the contract.  If the Supreme Court struck down the waiver authority of the TAA, clause 52.225-11 would not need to be changed as it does not rely on TAA authority.

As for why there is not a separate TAA clause for construction, I would ask why would there need to be?  The BAA itself waives the restriction, and the existing clause implements the requirements of applicable trade agreements.

5 minutes ago, Lionel Hutz said:

52.225-11 

There is a difference between trade agreements and the Trade Agreements Act.  Trade agreements can be implemented in a number of different ways.  The TAA is one of them.  However, trade agreements can also be implemented under the BAA.

The BAA (at 41 U.S.C. 8303) provides that construction contracts must use domestic construction materials.  However, it also provides as an exception the following: "This section does not apply - ... (B) to any articles, materials, or supplies procured pursuant to a reciprocal defense procurement memorandum of understanding (as described in section 8304), or a trade agreement or least developed country designation described in subpart 25.400 of the Federal Acquisition Regulation."

If you look at the language of 52.225-11, it states, "In addition, the Contracting Officer has determined that the WTO GPA and Free Trade Agreements (FTAs) apply to this acquisition. Therefore, the Buy American restrictions are waived for designated country construction materials."

The BAA itself allows for the exception found in the WTO GPA, and the clause then implements that exception in the contract.  If the Supreme Court struck down the waiver authority of the TAA, clause 52.225-11 would not need to be changed as it does not rely on TAA authority.

As for why there is not a separate TAA clause for construction, I would ask why would there need to be?  The BAA itself waives the restriction, and the existing clause implements the requirements of applicable trade agreements.

Ok, so you're saying FAR 52.225-11 implements trade agreements entered into under the authority of the TAA, but it does not implement the TAA?

I keep reading that clause 52.225-11 "implements the BAA statute for construction materials" - presumably because section (b)(1) of the clause states "this clause implements 41 U.S.C. chapter 83, Buy American, by providing a preference for domestic construction material"...

Okay, but read on. Section (b)(1) of the clause also states "in accordance with 41 U.S.C.1907, the domestic content test of the Buy American statute is waived for construction material that is a COTS item, except that for construction material that consists wholly or predominantly of iron or steel or a combination of both , the domestic content test is applied only to the iron and steel content of the construction material , excluding COTS fasteners."

Okay, that's almost verbatim what clause 52.225-9 say in the same section. But then clause 52.225-11 diverges from clause 52.225-9 (in my mind they both implement the BAA) and states the key aspect of the trade agreements rule as follows: "In addition, the Contracting Officer has determined that the WTO GPA and Free Trade Agreements (FTAs) apply to this acquisition. Therefore, the Buy American restrictions are waived for designated country construction materials".

Get that? Clause 52.225-11 actually waives the BAA requirements for designated country construction materials - not quite the same as "implementing" - or in a sense, it implements the BAA with some conditions - i.e. the TA waiver.

I guess you can argue that 52.225-9 implements the BAA requirements without any trade agreements waivers, whereas 52.225-11 implements the BAA requirements, but also provides for trade agreements waivers - technically that would be correct, but in this context, when the requirements at FAR 25.4 apply, you should use clause 52.225-11 (for construction materials) and when the requirements do not apply, it seems to me that you should not use that clause because that clause waives the BAA requirements for certain countries in the context of the trade agreements. It seems to me that if you wanted to implement the BAA without regard to trade agreement countries (because trade agreements don't apply to this class of procurements), you would use the clause that implements the BAA for construction materials that does NOT provide a waiver for trade agreements countries - that clause would be 52.225-9. To me, it seems like the prescriptions are not quite right.

5 hours ago, Don Mansfield said:

Ok, so you're saying FAR 52.225-11 implements trade agreements entered into under the authority of the TAA, but it does not implement the TAA?

I'm saying FAR 52.225-11 implements the BAA as applied to construction contracts that exceed the applicable WTOGPA threshold.

23 minutes ago, Lionel Hutz said:

I'm saying FAR 52.225-11 implements the BAA as applied to construction contracts that exceed the applicable WTOGPA threshold.

but would you use that clause if the WOT GPA doesn't apply - whether because of threshold or because of the type of procurement (e.g. small business set-aside)?

or would it make more sense to use a clause that just implements the BAA without waiving any of its requirements, particularly is it concerns WTO GPA?

1 minute ago, MileHighAcq said:

but would you use that clause if the WOT GPA doesn't apply - whether because of threshold or because of the type of procurement (e.g. small business set-aside)?

or would it make more sense to use a clause that just implements the BAA without waiving any of its requirements, particularly is it concerns WTO GPA?

You follow the clause prescription -  "Insert the clause at 52.225-11, Buy American-Construction Materials under Trade Agreements, in solicitations and contracts for construction that is performed in the United States valued at $7,032,000 or more."

That dollar value in the prescription changes to match the WTOGPA threshold.  So, it will only be used to apply the BAA to construction contracts that are covered by the WTOGPA, i.e., "Construction Materials under Trade Agreements."  You are not using that clause because 25.4 applies.  You are using that clause because the BAA itself has a waiver for construction materials purchased under trade agreements and 52.225-11 implements the BAA restrictions and applicable waiver. Yes, you use the clause for small business set-asides because the BAA applies to small business set-aside contracts.

If the value of the contract is below the threshold, you follow the applicable prescription - "Insert the clause at 52.225-9, Buy American-Construction Materials, in solicitations and contracts for construction that is performed in the United States valued at less than $7,032,000."

On 3/16/2022 at 3:04 PM, Lionel Hutz said:

The clause expressly states, "This clause implements 41 U.S.C. chapter 83, Buy American, by providing a preference for domestic construction material."  So, 25.1102 is implementing provisions of the Buy American Act, which does apply to small business set asides.  That is why there is no exception.

FAR 52.225-3, an analogous clause used for supply contracts, contains a similar statement in paragraph (c). Do you think this clause applies to small business set-asides?

21 minutes ago, Don Mansfield said:

FAR 52.225-3, an analogous clause used for supply contracts, contains a similar statement in paragraph (c). Do you think this clause applies to small business set-asides?

I wouldn't say the -3 and the -11 clauses are analogous.  

The prescription for the -3 clause says to use the clause if no exception in 25.401 applies (see FAR 25.1101(b)(1)(i)(C)).  But FAR 25.401(a)(1) speaks to set-asides, so I would not use the -3 clause if a procurement was a set-aside.

1 hour ago, ji20874 said:

I wouldn't say the -3 and the -11 clauses are analogous.  

The prescription for the -3 clause says to use the clause if no exception in 25.401 applies (see FAR 25.1101(b)(1)(i)(C)).  But FAR 25.401(a)(1) speaks to set-asides, so I would not use the -3 clause if a procurement was a set-aside.

Agreed.

One thing that I think will help people see the difference is that the BAA’s restrictions and waiver for designated countries is different than the TAA’s waiver and restrictions.

First, let’s look at the BAA-Construction Materials as implemented in 52.225-9, which provides that contractors may not provide foreign construction material unless the Government (i.e., the KO) determines that an exception to the Buy American statute applies.  Among others, there are exceptions for COTS construction materials, information technology, and foreign construction material excepted by the KO.  The KO can except construction material if the “cost of domestic construction material would be unreasonable.”  The clause the states that the cost is unreasonable if the domestic material exceeds the cost of foreign material by more than 20 percent, and it allows the contractor to submit data to support the determination and exception.

52.225-11 is similar but adds the exception that if the value of the acquisition exceeds the WTOGPA threshold, then the domestic restriction is waived, but only for designated country construction materials.  In other words, you treat domestic and designated country materials equally.  But, the agency can still purchase foreign materials if the contractor demonstrates the cost of domestic or designated country material exceeds the cost of foreign material be more than 20 percent.

Now, let’s look at the Trade Agreements Act.  In general, when applicable the TAA does two things:

(1) It waives the BAA, and

(2) It imposes its own purchase restrictions.

The first thing to note is that the TAA waiver is similar to the BAA waiver in that it requires designated country products to be treated the same as domestic products.  But, as implemented under the FAR, the TAA does not waive the BAA when the contract has been set aside for small businesses, a significant difference.

In addition, the TAA purchase restriction is different.  As implemented in FAR 25.403, it states that only U.S.-made or designated country end products or services may be purchased unless such end products or services are either not received or are insufficient to fulfill the requirements.  There is no exception in the TAA or FAR Subpart 25.4 that allows you to purchase foreign construction material based on an “unreasonable cost” determination.

Further, the manner in which you determine whether an article is domestic/US-Made vs designated country vs foreign is different between the BAA and TAA. 

This is why you cannot have one clause implementing both the BAA and the TAA.  They have different and conflicting requirements.  As a law firm noted in this article, “where the TAA applies, the BAA does not apply.”

The BAA and TAA are similar in many ways and there is overlap in their subject matter coverage.  If different regulations had been promulgated, the line differentiating the application of the two could have been different.  But, as practitioners, KOs should follow the line that has been established by the applicable regs and follow the clause prescriptions.