As prescribed in 225.1101(2)(i) and (2)(ii), use the basic or the alternate of the clause at 252.225-7001, Buy American and Balance of Payments Program, instead of the clause at FAR 52.225-1, Buy American—Supplies, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, unless—
(A) All line items will be acquired from a particular source or sources under the authority of FAR 6.302-3;
(B) All line items require domestic or qualifying country end products in accordance with subpart 225.70, but note that this exception does not apply if subpart 225.70 only requires manufacture of the end product in the United States or in the United States or Canada, without a corresponding requirement for use of domestic components;
(C) The acquisition is for supplies for use within the United States and an exception to the Buy American statute applies, e.g., nonavailability or public interest (see FAR 25.103 and 225.103);
(D) The acquisition is for supplies for use outside the United States and an exception to the Balance of Payments Program applies (see 225.7501);
(E) One or more of the basic or the alternates of the following clauses will apply to all line items in the contract:
(1) 252.225-7021, Trade Agreements.
(2) 252.225-7036, Buy American—Free Trade Agreements—Balance of Payments Program; or
(F) All line items will be acquired using a procedure specified in 225.7703-1(a).
(ii) Use the basic clause if the acquisition is not of end products listed in 225.401-70 in support of operations in Afghanistan.
(iii) Use the alternate I clause when the acquisition is of end products listed in 225.401-70 in support of operations in Afghanistan.
BUY AMERICAN AND BALANCE OF PAYMENTS PROGRAM—BASIC (DEC 2017)
(a) Definitions. As used in this clause—
“Commercially available off-the-shelf (COTS) item”—
(i) Means any item of supply (including construction material) that is—
(A) A commercial item (as defined in paragraph (1) of the definition of “commercial item” in section 2.101 of the Federal Acquisition Regulation);
(B) Sold in substantial quantities in the commercial marketplace; and
(C) Offered to the Government, under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace; and
(ii) Does not include bulk cargo, as defined in 46 U.S.C. 40102(4), such as agricultural products and petroleum products.
“Component” means an article, material, or supply incorporated directly into an end product.
“Domestic end product” means—
(i) An unmanufactured end product that has been mined or produced in the United States; or
(ii) An end product manufactured in the United States if—
(A) The cost of its qualifying country components and its components that are mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. The cost of components includes transportation costs to the place of incorporation into the end product and U.S. duty (whether or not a duty-free entry certificate is issued). Scrap generated, collected, and prepared for processing in the United States is considered domestic. A component is considered to have been mined, produced, or manufactured in the United States (regardless of its source in fact) if the end product in which it is incorporated is manufactured in the United States and the component is of a class or kind for which the Government has determined that—
(1) Sufficient and reasonably available commercial quantities of a satisfactory quality are not mined, produced, or manufactured in the United States; or
(2) It is inconsistent with the public interest to apply the restrictions of the Buy American statute; or
(B) The end product is a COTS item.
“End product” means those articles, materials, and supplies to be acquired under this contract for public use.
“Foreign end product” means an end product other than a domestic end product.
“Qualifying country” means a country with a reciprocal defense procurement memorandum of understanding or international agreement with the United States in which both countries agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country, and the memorandum or agreement complies, where applicable, with the requirements of section 36 of the Arms Export Control Act (22 U.S.C. 2776) and with 10 U.S.C. 2457. Accordingly, the following are qualifying countries:
United Kingdom of Great Britain and Northern Ireland.
“Qualifying country component” means a component mined, produced, or manufactured in a qualifying country.
“Qualifying country end product” means—
(i) An unmanufactured end product mined or produced in a qualifying country; or
(ii) An end product manufactured in a qualifying country if—
(A) The cost of the following types of components exceeds 50 percent of the cost of all its components:
(1) Components mined, produced, or manufactured in a qualifying country.
(2) Components mined, produced, or manufactured in the United States.
(3) Components of foreign origin of a class or kind for which the Government has determined that sufficient and reasonably available commercial quantities of a satisfactory quality are not mined, produced, or manufactured in the United States; or
(B) The end product is a COTS item.
“United States” means the 50 States, the District of Columbia, and outlying areas.
(b) This clause implements 41 U.S.C chapter 83, Buy American. In accordance with 41 U.S.C. 1907, the component test of the Buy American statute is waived for an end product that is a COTS item (see section 12.505(a)(1) of the Federal Acquisition Regulation). Unless otherwise specified, this clause applies to all line items in the contract.
(c) The Contractor shall deliver only domestic end products unless, in its offer, it specified delivery of other end products in the Buy American—Balance of Payments Program Certificate provision of the solicitation. If the Contractor certified in its offer that it will deliver a qualifying country end product, the Contractor shall deliver a qualifying country end product or, at the Contractor’s option, a domestic end product.
(d) The contract price does not include duty for end products or components for which the Contractor will claim duty-free entry.
(End of clause)