Buy American Act and Supplies
Other Key Information
If a product is not otherwise covered by trade agreements or defence agreements, the discriminatory provisions of the Buy American Act (the Act) apply. A description of the Act and how it is implemented for supplies, is contained at FAR Subpart 25.1 and in corresponding parts of agency acquisition regulations.
The Act applies "to supplies acquired for use in the United States... " and when applicable, provides a preference for U.S. domestic products unless:
- the product is not available in the U.S.;
- procuring a U.S. domestic product is not economically feasible; or
- preference for a U.S. domestic product is inconsistent with the public interest.
In the case of procurements subject to the North American Free Trade Agreement or to any other international agreement, Buy American is waived using the "public interest" exception.
When offers are received of other than U.S. products, and the public interest exception does not apply, an amount may be added to the offer price before comparison with offers received for U.S. products.
Under these circumstances, a Canadian company normally would have 6% added to its offer price when being compared to an offer from a U.S. large business. If a Canadian offer is being compared to an offer from a U.S small business, 12% normally is added to its price. If the Canadian offer is lower after evaluation percentages have been added, the contracting officer can determine that the price of the domestic offer is not reasonable, and an award can be made to the Canadian firm. Obviously, a Canadian firm would have to submit a very attractive price to take advantage of this exception.
It should be noted that while increases of 6% and 12% are norms, the head of an agency can determine that higher increases would be more appropriate. Such determination must be made in writing.
At FAR Subpart 25.104, you will find a list of products determined to be "not available" in the U.S. (note this list is not all-inclusive). For example, a product developed by a Canadian company that has exclusive rights to its manufacture would also be considered "not available" in the U.S. and would fall under the non-availability exception if the U.S. government wished to buy it.
If a proposed procurement goes through normal procedures for full and open competition (including advertising for bids or offers) and no domestic offer is received, the U.S. contracting officer can conclude that the product is "not available" in the U.S. and proceed on the basis of other offers received.
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