As prescribed in 225.7503(a), unless the entire acquisition is exempt from the Balance of Payments Program—
(a) Use the basic or an alternate of the clause at 252.225-7044, Balance of Payments Program—Construction Material, in solicitations and contracts for construction to be performed outside the United States, including acquisitions of commercial items or components, with an estimated value greater than the simplified acquisition threshold but less than $7,008,000.
(1) Use the basic clause unless the acquisition is in support of operations in Afghanistan.
(2) Use the alternate I clause if the acquisition is in support of operations in Afghanistan.
BALANCE OF PAYMENTS PROGRAM—CONSTRUCTION MATERIAL—BASIC (NOV 2014)
(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 any article, material, or supply incorporated directly into construction material.
“Construction material” means an article, material, or supply brought to the construction site by the Contractor or a 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.
“Cost of components” means—
(i) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or
(ii) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the construction material.
“Domestic construction material” means—
(i) An unmanufactured construction material mined or produced in the United States; or
(ii) A construction material manufactured in the United States, if—
(A) The cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind for which nonavailability determinations have been made are treated as domestic; or
(B) The construction material is a COTS item.
“United States” means the 50 States, the District of Columbia, and outlying areas.
(b) Domestic preference. This clause implements the Balance of Payments Program by providing a preference for domestic construction material. The Contractor shall use only domestic construction material in performing this contract, except for--
(1) Construction material valued at or below the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation;
(2) Information technology that is a commercial item; or
(3) The construction material or components listed by the Government as follows:
[Contracting Officer to list applicable excepted materials or indicate “none”]
(End of clause)