B-153408, MAR. 16, 1964

B-153408: Mar 16, 1964

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HOUSING AND HOME FINANCE AGENCY: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 30. THE MATERIAL INVOLVED IS A BELGIAN-MANUFACTURED PRODUCT KNOWN AS GLASWELD WHICH IS AN ASBESTOS-CEMENT EXTERIOR PANEL WITH AN INORGANIC COLORED COATING WHICH THE DISTRIBUTOR. WILL BE SUFFICIENT TO AMORTIZE THE PRINCIPAL AND INTEREST OF THE INDEBTEDNESS INCURRED BY THE LOCAL AUTHORITY IN THE DEVELOPMENT OF THE PROJECT. CONSTRUCTION CONTRACT DOCUMENTS ARE PREPARED BY THE LOCAL HOUSING AUTHORITIES AND THEIR ARCHITECTS. ARE REVIEWED AND APPROVED BY PHA TO ASSURE ACHIEVEMENT OF THE OBJECTIVES OF THE HOUSING ACT. THE PRINCIPAL STANDARDS ESTABLISHED BY THE CONGRESS WHICH GUIDE PHA IN SUCH REVIEWS ARE CERTAIN PROVISIONS OF THE HOUSING ACT AS SET OUT IN 42 U.S.C. 1402 (1) AND 1415 (5) WHICH DEFINE THE PHRASE "LOW-RENT HOUSING" AND REQUIRE THAT PHA SHALL SPECIFICALLY APPROVE THE AMOUNT OF THE MAIN CONSTRUCTION CONTRACT FOR EACH PROJECT SO THAT THE OBJECTIVES OF ECONOMY AND SOUND CONSTRUCTION MAY BE PROMOTED.

B-153408, MAR. 16, 1964

TO ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 30, 1964, REQUESTING A DECISION AS TO THE METHOD OF APPLYING THE BUY AMERICAN ACT, 41 U.S.C. 10, IN THE LOW-RENT HOUSING PROGRAM ADMINISTERED BY THE PUBLIC HOUSING ADMINISTRATION (PHA) AND AS TO WHAT STANDARDS, IF ANY, OUGHT TO BE ESTABLISHED BY THE PHA, CONSISTENT WITH THE ACT, TO GIVE FOREIGN PRODUCTS AN OPPORTUNITY TO COMPETE.

THE MATTERS PRESENTED IN YOUR LETTER CONCERN PRIMARILY THE USE OF AN IMPORTED MATERIAL SOLD BY THE UNITED STATES PLYWOOD CORPORATION FOR POSSIBLE USE IN THE CONSTRUCTION OF LOW-RENT HOUSING PROJECTS DEVELOPED BY LOCAL PUBLIC HOUSING AGENCIES WITH FEDERAL FINANCIAL ASSISTANCE UNDER THE UNITED STATES HOUSING ACT OF 1937, AS AMENDED, 42 U.S.C. 1401 ET SEQ. THE MATERIAL INVOLVED IS A BELGIAN-MANUFACTURED PRODUCT KNOWN AS GLASWELD WHICH IS AN ASBESTOS-CEMENT EXTERIOR PANEL WITH AN INORGANIC COLORED COATING WHICH THE DISTRIBUTOR, UNITED STATES PLYWOOD CORPORATION, ALLEGES HAS BEEN USED ON GOVERNMENT PROJECTS LISTED IN ITS LETTER OF NOVEMBER 6, 1962, TO PHA AND HAS GAINED ACCEPTANCE AMONG ARCHITECTS AND BUILDERS AS A QUALITY PRODUCT WITH AESTHETIC VALUE.

THE ASSISTANCE PROVIDED BY PHA TO THE LOCAL PUBLIC HOUSING AGENCIES CONSISTS OF LOANS DURING THE DEVELOPMENT PERIOD AND ANNUAL CONTRIBUTIONS DURING THE PERIOD OF OPERATION IN AN AMOUNT WHICH, TOGETHER WITH RESIDUAL REVENUES FROM THE PROJECT, WILL BE SUFFICIENT TO AMORTIZE THE PRINCIPAL AND INTEREST OF THE INDEBTEDNESS INCURRED BY THE LOCAL AUTHORITY IN THE DEVELOPMENT OF THE PROJECT. CONSTRUCTION CONTRACT DOCUMENTS ARE PREPARED BY THE LOCAL HOUSING AUTHORITIES AND THEIR ARCHITECTS, AND ARE REVIEWED AND APPROVED BY PHA TO ASSURE ACHIEVEMENT OF THE OBJECTIVES OF THE HOUSING ACT. THE PRINCIPAL STANDARDS ESTABLISHED BY THE CONGRESS WHICH GUIDE PHA IN SUCH REVIEWS ARE CERTAIN PROVISIONS OF THE HOUSING ACT AS SET OUT IN 42 U.S.C. 1402 (1) AND 1415 (5) WHICH DEFINE THE PHRASE "LOW-RENT HOUSING" AND REQUIRE THAT PHA SHALL SPECIFICALLY APPROVE THE AMOUNT OF THE MAIN CONSTRUCTION CONTRACT FOR EACH PROJECT SO THAT THE OBJECTIVES OF ECONOMY AND SOUND CONSTRUCTION MAY BE PROMOTED. BASED UPON THE CONGRESSIONAL ESTABLISHMENT OF A 40-YEAR FINANCING PERIOD, THE STATUTORY SCHEME CONTEMPLATES HOUSING CONSTRUCTION OF SUFFICIENT QUALITY TO ENDURE IN A SATISFACTORY CONDITION OVER THAT SPAN OF TIME.

THERE WAS ENCLOSED WITH YOUR LETTER A COPY OF PART TWO OF THE PHA ANNUAL CONTRIBUTIONS CONTRACT (IN PAMPHLET FORM) WHICH CONTAINS THE STANDARD TERMS AND CONDITIONS UNDER WHICH FEDERAL FINANCIAL ASSISTANCE IS EXTENDED FOR THE PROVISION OF LOW-RENT HOUSING. SECTION 101 OF THESE CONTRACT TERMS PROVIDES THAT EACH PROJECT SHALL BE UNDERTAKEN IN SUCH A MANNER THAT IT WILL NOT BE OF ELABORATE OR EXTRAVAGANT DESIGN OR MATERIALS, AND WILL BE DEVELOPED AND ADMINISTERED TO PROMOTE SERVICEABILITY, EFFICIENCY, ECONOMY AND STABILITY. SECTIONS 106 AND 108 REQUIRE THE SUBMISSION FOR PRIOR PHA APPROVAL OF PLANS, DRAWINGS, SPECIFICATIONS AND BID INVITATIONS. SECTION 109 (B) REQUIRES, WITH CERTAIN EXCEPTIONS, THAT THE LOCAL AUTHORITY "GIVE FULL OPPORTUNITY FOR OPEN AND COMPETITIVE BIDDING.' SECTION 110 (A) REQUIRES THAT CONTRACT AWARDS BE MADE ONLY TO "THE LOWEST RESPONSIBLE BIDDER.' SECTION 303 PROVIDES AS FOLLOWS:

"EACH CONTRACT ENTERED INTO BY THE LOCAL AUTHORITY IN CONNECTION WITH THE CONSTRUCTION, ALTERATION, OR REPAIR OF ANY PROJECT SHALL REQUIRE THAT THERE SHALL BE USED, AND THE LOCAL AUTHORITY SHALL ITSELF USE, IN THE CONSTRUCTION, ALTERATION, AND REPAIR OF ANY PROJECT ONLY SUCH UNMANUFACTURED ARTICLES, MATERIALS, AND SUPPLIES AS HAVE BEEN MINED OR PRODUCED IN THE UNITED STATES, AND ONLY SUCH MANUFACTURED ARTICLES, MATERIALS, AND SUPPLIES AS HAVE BEEN MANUFACTURED IN THE UNITED STATES SUBSTANTIALLY ALL FROM ARTICLES, MATERIALS, OR SUPPLIES MINED, PRODUCED, OR MANUFACTURED, AS THE CASE MAY BE, IN THE UNITED STATES. THE PHA RESERVES THE RIGHT, UPON REQUEST OF THE LOCAL AUTHORITY, TO WAIVE THE FOREGOING RESTRICTIONS IF THE PHA DETERMINES THAT THE USE OF DOMESTIC ARTICLES, MATERIALS, OR SUPPLIES IS IMPRACTICABLE, OR THAT THE COST THEREOF AS DETERMINED BY THE PHA IS UNREASONABLE.'

THE PROVISIONS WITH REGARD TO THE BUY AMERICAN ACT, 41 U.S.C. 10, WERE REQUIRED BY THE PROVISIONS OF 42 U.S.C. 1406 (C), TO BE INCORPORATED IN EVERY CONTRACT MADE PURSUANT TO THE HOUSING ACT.

YOU STATE THAT IN THE CONSIDERATION OF REQUESTS FOR WAIVERS UNDER SECTION 303 OF THE CONTRACT TERMS PHA HAS DETERMINED TO BE GUIDED BY EXECUTIVE ORDER NO. 10582, 19 F.R. 8723 (1954), PRESCRIBING UNIFORM PROCEDURES FOR CERTAIN DETERMINATIONS UNDER THE BUY AMERICAN ACT ALTHOUGH THE EXECUTIVE ORDER WOULD APPEAR TO BE DIRECTED TO GOVERN FEDERAL PURCHASES AND NOT TO PHA DETERMINATIONS WITH RESPECT TO LOCAL AUTHORITIES UNDER CONTRACT WITH PHA. YOU STATE FURTHER THAT IN RESPONSE TO A REQUEST TO GRANT GLASWELD, AN IMPORTED MATERIAL, AN EXCEPTION FROM THE BUY AMERICAN ACT "THE PHA DETERMINED THAT THERE ARE SATISFACTORY DOMESTICALLY MANUFACTURED MATERIALS AVAILABLE AT SUBSTANTIALLY LOWER INITIAL COST THAN GLASWELD," THE COST PER SQUARE FOOT FOR GLASWELD BEING 50 CENTS AND THE DOMESTICALLY MANUFACTURED ASBESTOS BOARDS, 24, 22 AND 16 CENTS. YOUR BASIS FOR THE DETERMINATION THAT DOMESTICALLY MANUFACTURED MATERIALS ARE AVAILABLE AT LOWER COSTS IS AS FOLLOWS:

"IN ORDER TO DETERMINE THE SUITABILITY OF THE DOMESTICALLY MANUFACTURED MATERIAL OVER A 40-YEAR PERIOD, THE PHA STAFF MADE AN ECONOMIC STUDY BASED UPON INFORMATION AVAILABLE FROM MANUFACTURERS' PUBLICATIONS AND THEIR REPRESENTATIVES' STATEMENTS. FOR THE PURPOSES OF THIS STUDY, THE FOLLOWING PRODUCTS WERE CHOSEN FROM MANY WHICH ARE MANUFACTURED IN THE UNITED STATES: "RIPPLE-TONE PLASTI-CLAD" BY NATIONAL GYPSUM CO., "PERMATONE" BY JOHNS-MANVILLE, AND PLAIN ASBESTOS BOARD BY JOHNS- MANVILLE. THE STUDY COMBINED MANUFACTURERS' CLAIMS, GUARANTEES, WARRANTIES AND ESTIMATES, WITH OUR BEST JUDGMENT. HOWEVER, IT WAS DONE WITHOUT THE BENEFIT OF LABORATORY TESTS OR FIELD SURVEYS.

"CERTAIN ASSUMPTIONS WERE MADE PRIOR TO THE STUDY AS FOLLOWS:

(A) THAT DIFFERENCES IN APPEARANCE, CONDUCTIVITY, COMBUSTIBILITY, EASE OF CLEANING AND INSTALLATION COSTS WERE NEGLIGIBLE;

(B) THAT REFINISHING OF ALL MATERIAL WOULD BE REQUIRED DURING AN ASSUMED USEFUL 40-YEAR LIFE: GLASWELD WILL REQUIRE TWO REFINISHINGS; DOMESTIC PRODUCTS WILL REQUIRE THREE OR FOUR REFINISHINGS;

(C) THAT PRICES OF REFINISHING AND LABOR WILL RISE AT A SIMPLE RATE OF 6 PERCENT PER YEAR AND,

(D) THAT COMPOUND "GOING RATE" OF INTEREST IS 3 PERCENT PER YEAR.

"THE RESULTS OF THESE COMPUTATIONS INDICATED THAT THE "PRESENT VALUE" PER SQUARE FOOT FOR BUYING AND REFINISHING GLASWELD AND THREE DOMESTIC MATERIALS ARE AS FOLLOWS: GLASWELD 81 CENTS AND DOMESTIC ASBESTOS BOARDS AT 68, 77 AND 85 CENTS RESPECTIVELY.

" "PRESENT VALUE" IS DEFINED AS THE AMOUNT OF PRESENT DOLLARS PLACED AT THE ASSUMED RATE OF INTEREST WHICH WILL SUFFICE TO BUY AND REFINISH THE MATERIAL AT FUTURE PERIODIC TIMES AND AT ANTICIPATED FUTURE PRICES.

"UNITED STATES PLYWOOD CONTENDS, HOWEVER, THAT GLASWELD IS EXEMPT ON TWO GROUNDS: (1) THAT GLASWELD IS MANUFACTURED FROM RAW ASBESTOS WHICH COSTS MORE THAN 50 PERCENT OF OTHER RAW MATERIALS USED IN ITS MANUFACTURE AND ASBESTOS IS NOT COMMERCIALLY MINED IN THE UNITED STATES; AND (2) GLASWELD IS A UNIQUE MATERIAL WHICH DOES NOT COMPETE WITH ANY DOMESTIC MATERIAL MANUFACTURED UNDER THE SAME PROCESS. * * *"

YOU REQUEST ADVICE ON THE FOLLOWING QUESTIONS---

"1. IS PHA REQUIRED TO APPLY THE STANDARDS PRESCRIBED BY EXECUTIVE ORDER 10582 WITH RESPECT TO ITS DETERMINATIONS AS TO WHETHER FOREIGN MATERIALS MAY BE UTILIZED BY LOCAL HOUSING AUTHORITIES IN CONNECTION WITH THE DEVELOPMENT OF LOW-RENT HOUSING PROJECTS PURSUANT TO THE USHACT OF 1937, AS AMENDED?

"2. IN THE LIGHT OF YOUR ANSWER TO THE FOREGOING QUESTION MAY THE FOREIGN PRODUCT, GLASWELD, BE TREATED BY THE PHA AS EXEMPT FROM THE BUY-AMERICAN REQUIREMENTS OF THE USHACT, AS CONTENDED BY UNITED STATES PLYWOOD?

"3. IF YOUR ANSWER TO QUESTION 2 IS IN THE NEGATIVE, IS PHA REQUIRED TO PROVIDE A METHOD WHEREBY GLASWELD MAY BE INCLUDED IN ADVERTISED SPECIFICATIONS FOR CONTRACTS OF LOCAL HOUSING AUTHORITIES TO PERMIT COMPETITION WITH DOMESTICALLY MANUFACTURED MATERIALS SUITABLE FOR THE SAME PURPOSE?

"4. IF PHA IS REQUIRED TO DO SO, WHAT BASIS SHALL BE USED FOR DETERMINATION OF WHETHER A WAIVER OF THE BUY-AMERICAN REQUIREMENTS MAY BE GRANTED IN THE LIGHT OF UNITED STATES PLYWOOD'S CONTENTION THAT THE PRODUCT, IN EFFECT, IS UNIQUE?

YOUR DOUBT AS TO THE APPLICABILITY OF THE STANDARDS PRESCRIBED BY EXECUTIVE ORDER NO. 10582, AS INDICATED IN YOUR QUESTIONS, IS BASED ON THE FACT THAT THE ORDER WAS DIRECTED TO "FEDERAL PURCHASES.' THE BUY AMERICAN ACT, AS SUCH, DEALT ONLY WITH FEDERAL PURCHASES BUT THE HOUSING ACT (42 U.S.C. 1406 (C) ( NEVERTHELESS MADE THE FUNDS AVAILABLE UNDER THE ACT SUBJECT TO THE PROVISONS OF THE BUY AMERICAN ACT (41 U.S.C. 10A) AND REQUIRED THAT EVERY CONTRACT OR AGREEMENT OF ANY KIND PURSUANT TO THE ACT SHOULD CONTAIN A PROVISION IDENTICAL TO THAT PRESCRIBED IN SECTION 10B OF THE BUY AMERICAN ACT. EXECUTIVE ORDER NO. 10582 WAS INTENDED MERELY TO ESTABLISH UNIFORM PROCEDURES IN ADMINISTERING THE ACT AND SHOULD BE REGARDED FOR APPLICATION IN THE SAME MANNER AS THE PROVISIONS OF THE ACT. YOUR ATTENTION IN INVITED, HOWEVER, TO SECTION 5 OF THE ORDER WHICH PROVIDES THAT THE HEADS OF EXECUTIVE AGENCIES MAY MAKE DETERMINATIONS, IN SPECIFIC CASES, TO DEVIATE FROM THE REQUIREMENTS OF THE ORDER.

THE FIRST AND MOST IMPORTANT MATTER TO BE DECIDED BY YOUR AGENCY IN COOPERATION WITH THE LOCAL HOUSING AGENCIES IS WHAT TYPE OF PRODUCT MEETS THE NEEDS OF THE SERVICE. ORDINARILY, THIS SHOULD NOT INVOLVE THE DESIGNATION OF A BRAND NAME PRODUCT BUT THE SPECIFICATIONS SHOULD SET OUT THE MINIMUM REQUIREMENTS FOR THE PRODUCT DESIRED. IF, AS IS INDICATED IN YOUR SUBMISSION, A DOMESTIC PRODUCT MEETS THE REQUIREMENTS OF THE SPECIFICATIONS, THERE IS CONSIDERABLE DOUBT THAT A QUOTATION ON A FOREIGN PRODUCT SHOULD BE CONSIDERED BY THE CONSTRUCTION CONTRACTOR FOR REASONS SET OUT HEREIN. IN THIS CONNECTION 41 U.S.C. 10B PROVIDES IN PERTINENT PART AS FOLLOWS:

"/A) EVERY CONTRACT FOR THE CONSTRUCTION, ALTERATION, OR REPAIR OF ANY PUBLIC BUILDING OR PUBLIC WORK IN THE UNITED STATES GROWING OUT AN AN APPROPRIATION HERETOFORE MADE OR HEREAFTER TO BE MADE SHALL CONTAIN A PROVISION THAT IN THE PERFORMANCE OF THE WORK THE CONTRACTOR, SUBCONTRACTORS, MATERIAL MEN, OR SUPPLIERS, SHALL USE * * * ONLY SUCH MANUFACTURED ARTICLES, MATERIALS, AND SUPPLIES AS HAVE BEEN MANUFACTURED IN THE UNITED STATES SUBSTANTIALLY ALL FROM ARTICLES, MATERIALS, OR SUPPLIES MINED, PRODUCED, OR MANUFACTURED, AS THE CASE MAY BE, IN THE UNITED STATES EXCEPT AS PROVIDED IN SECTION 10A OF THIS TITLE: PROVIDED, HOWEVER, THAT IF THE HEAD OF THE DEPARTMENT OR INDEPENDENT ESTABLISHMENT MAKING THE CONTRACT SHALL FIND THAT IN RESPECT TO SOME PARTICULAR ARTICLES, MATERIALS, OR SUPPLIES IT IS IMPRACTICABLE TO MAKE SUCH REQUIREMENT OR THAT IT WOULD UNREASONABLY INCREASE THE COST, AN EXCEPTION SHALL BE NOTED IN THE SPECIFICATIONS AS TO THAT PARTICULAR ARTICLE, MATERIAL, OR SUPPLY, AND A PUBLIC RECORD MADE OF THE FINDINGS WHICH JUSTIFIED THE EXCEPTION.'

IN FURTHERANCE OF THIS LEGISLATION THE FEDERAL PROCUREMENT REGULATIONS SUBPART 1-6.201, PROVIDE AS FOLLOWS:

"AS USED IN THIS SUBPART, THE FOLLOWING DEFINITIONS APPLY:

"/D) "DOMESTIC CONSTRUCTION MATERIAL" MEANS AN UNMANUFACTURED CONSTRUCTION MATERIAL WHICH HAS BEEN MINED OR PRODUCED IN THE UNITED STATES, OR A MANUFACTURED CONSTRUCTION MATERIAL WHICH HAS BEEN MANUFACTURED IN THE UNITED STATES IF THE COST OF ITS COMPONENTS WHICH ARE MINED, PRODUCED, OR MANUFACTURED IN THE UNITED STATES EXCEEDS 50 PERCENT OF THE COST OF ALL ITS COMPONENTS.

"/E) "NONDOMESTIC CONSTRUCTION MATERIAL" MEANS A CONSTRUCTION MATERIAL OTHER THAN A DOMESTIC CONSTRUCTION MATERIAL.' ALSO, THE FEDERAL PROCUREMENT REGULATIONS PROVIDE IN SUBPART 1-6.202-1 AS FOLLOWS:

"ONLY DOMESTIC CONSTRUCTION MATERIAL SHALL BE USED IN THE PERFORMANCE OF CONTRACTS FOR CONSTRUCTION IN THE UNITED STATES MADE BY EXECUTIVE AGENCIES, EXCEPT FOR PARTICULAR MATERIAL AS TO WHICH IT IS DETERMINED:

"/A) BY THE AGENCY HEAD, THAT TO MAKE SUCH REQUIREMENT IS IMPRACTICABLE;

"/B) IN ACCORDANCE WITH AGENCY PROCEDURES, THAT DOMESTIC CONSTRUCTION MATERIAL IS UNAVAILABLE IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY; OR

"/C) IN ACCORDANCE WITH SECTION 1-6.203, THAT TO MAKE SUCH REQUIREMENT WOULD UNREASONABLY INCREASE THE COST.'

IN ANY CASE WHERE DOMESTIC CONSTRUCTION MATERIAL AND NONDOMESTIC CONSTRUCTION MATERIAL BOTH MEET THE SPECIFICATIONS THE BUY AMERICAN ACT REQUIRES THAT MATERIAL MANUFACTURED IN THE UNITED STATES BE USED UNLESS YOU DETERMINE THAT THE PURCHASE OF DOMESTICALLY MANUFACTURED MATERIAL IS IMPRACTICABLE OR THE COST THEREOF IS UNREASONABLE. THE FACTS IN THIS CASE ARE SIMILAR TO THOSE CONSIDERED IN OUR DECISION OF JANUARY 28, 1963, B- 150306, 42 COMP. GEN. 401, WHEREIN WE CONSIDERED THE USE IN A CONSTRUCTION CONTRACT OF ASBESTOS CEMENT PIPE ENTIRELY MANUFACTURED IN BELGIUM WHERE IT WAS CONTENDED THAT THE EXCEPTION OF ASBESTOS FROM THE STATUTORY REQUIREMENTS THAT ONLY DOMESTIC CONSTRUCTION MATERIAL BE USED IN THE PERFORMANCE OF THE CONTRACT NECESSARILY ENCOMPASSED THE PIPE MANUFACTURED THEREFROM. IN THAT CASE WE HELD THAT--- "CONCERNING THE PROVISION IN THE INVITATION FOR BIDS AND IN THE RESULTANT CONTRACT EXCEPTING ,ASBESTOS" FROM THE STATUTORY REQUIREMENTS, IT IS STATED IN YOUR FIELD SOLICITOR'S OPINION THAT ,THIS EXCEPTION APPLIES ONLY TO RAW OR UNMANUFACTURED ASBESTOS AND IS NOT APPLICABLE TO A MANUFACTURED PRODUCT WHICH UTILIZES ASBESTOS AS AN INGREDIENT EVEN WHERE THAT INGREDIENT COMPRISES A MAJOR PART OF THE END PRODUCT.' WE ARE IN COMPLETE ACCORD WITH THAT VIEW. THAT CONNECTION, FOR THE SPECIFIC PURPOSE OF CLARIFYING THE INTENT OF THE CONGRESS AS TO THE TREATMENT OF MANUFACTURED ARTICLES UNDER THE BUY AMERICAN ACT AND TO PROHIBIT THE PURCHASE OF ARTICLES MANUFACTURED ABROAD UNDER CIRCUMSTANCES SUCH AS THOSE CONSIDERED AND AUTHORIZED IN OUR DECISION OF APRIL 19, 1949, B-84306, 28 COMP. GEN. 591, THE BUY AMERICAN ACT WAS AMENDED BY SECTION 633 OF THE NATIONAL MILITARY ESTABLISHMENT APPROPRIATION ACT, 1950, APPROVED OCTOBER 29, 1949, 63 STAT. 987, 1024 (41 U.S.C. 10D) AS FOLLOWS:

"SEC. 633. IN ORDER TO CLARIFY THE ORIGINAL INTENT OF CONGRESS, HEREAFTER, SECTION 2 AND THAT PART OF SECTION 3 (A) PRECEDING THE WORDS "PROVIDED, HOWEVER," OF TITLE III OF THE ACT OF MARCH 3, 1933 (47 STAT. 1520), SHALL BE REGARDED AS REQUIRING THE PURCHASE, FOR PUBLIC USE WITHIN THE UNITED STATES, OF ARTICLES, MATERIALS, OR SUPPLIES MANUFACTURED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY, UNLESS THE HEAD OF THE DEPARTMENT OR INDEPENDENT ESTABLISHMENT CONCERNED SHALL DETERMINE THEIR PURCHASE TO BE INCONSISTENT WITH THE PUBLIC INTEREST OR THEIR COST TO BE UNREASONABLE.'

"THE ABOVE-QUOTED AMENDMENT TO THE BUY AMERICAN ACT, WHICH REQUIRES THE PURCHASE OF ARTICLES MANUFACTURED IN THE UNITED STATES IN PREFERENCE TO ARTICLES OF FOREIGN MANUFACTURE, EVEN THOUGH THE MATERIALS USED IN THE MANUFACTURE ARE OF FOREIGN ORIGIN, HAD THE EFFECT OF OVERRULING OUR DECISION IN 28 COMP. GEN. 591. IN VIEW OF THE SHOWING IN THE RECORD THAT DOMESTICALLY MANUFACTURED ASBESTOS CEMENT PIPE WAS AVAILABLE IN SUFFICIENT COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY, AND SINCE, IN THE ABSENCE OF INDICATION BY THE CONTRACTOR OF INTENT TO FURNISH FOREIGN- MANUFACTURED PIPE, THERE WAS NO DETERMINATION BY THE SECRETARY OF THE INTERIOR THAT THE PURCHASE OF SUCH DOMESTICALLY MANUFACTURED PIPE WAS INCONSISTENT WITH THE PUBLIC INTEREST OR THE COST THEREOF WAS UNREASONABLE, THERE APPEARS NO DOUBT- - REGARDLESS OF THE OPINION OF THE ATTORNEY GENERAL OF THE STATE OF CALIFORNIA, WHICH OBVIOUSLY WAS BASED ON THE SPECIFIC PROVISIONS OF THE CALIFORNIA BUY AMERICAN ACT, OR OF THE LEGAL PROPRIETY OF THE ALLEGED ACTIONS OF OTHER GOVERNMENT DEPARTMENTS IN ACCEPTING FOREIGN MANUFACTURED PIPE--- THAT INSTALLATION OF ASBESTOS- CEMENT PIPE MANUFACTURED IN BELGIUM CONSTITUTED A VIOLATION OF THE PROVISIONS OF THE BUY AMERICAN ACT AND OF THE CONTRACT.'

IN VIEW OF THE HOLDING IN B-150306, YOUR ANSWER TO THE SECOND QUESTION IN YOUR LETTER MUST BE IN THE NEGATIVE. AS TO YOUR THIRD QUESTION,YOUR ATTENTION IS INVITED TO OUR COMMENTS HEREINABOVE AS TO YOUR DETERMINATION, IN COOPERATION WITH THE LOCAL HOUSING AGENCIES, AS TO WHAT TYPE OF PRODUCT MEETS THE NEEDS OF THE SERVICE AND THE SPECIFICATIONS SHOULD STATE THE MINIMUM REQUIREMENTS. THIS DOES NOT NECESSARILY MEAN THAT THE PRODUCT GLASWELD WILL COMPETE FROM A PRICE STANDPOINT ON AN EQUAL BASIS WITH ACCEPTABLE DOMESTIC PRODUCTS, SUBJECT, OF COURSE, TO ANY DETERMINATION THAT YOU MAY MAKE THAT THE PURCHASE OF DOMESTICALLY MANUFACTURED PANEL IS INCONSISTENT WITH THE PUBLIC INTEREST OR THE COST THEREOF IS UNREASONABLE.

WITH REGARD TO YOUR FOURTH QUESTION, PHA IS NOT REQUIRED TO WAIVE THE REQUIREMENTS OF THE BUY AMERICAN ACT MERELY BECAUSE, AS CONTENDED BY THE UNITED STATES PLYWOOD CORPORATION, THE PRODUCT GLASWELD IS UNIQUE. IF, HOWEVER, IT IS FOUND THAT THE NEEDS OF THE SERVICE JUSTIFY A REQUIREMENT IN THE SPECIFICATIONS THAT THE PRODUCT TO BE USED SHOULD POSSESS CERTAIN QUALITIES, WE WOULD NOT BE REQUIRED TO OBJECT TO THE USE OF SPECIFICATIONS REFLECTING THIS NEED.

THE ATTORNEY FOR THE UNITED STATES PLYWOOD CORPORATION HAS ALLEGED, IN A LETTER DATED FEBRUARY 14, 1964, TO OUR OFFICE, THAT THE PRESENT INSTRUCTIONS TO "PHA LOCAL OFFICES BAR THE USE OF GLASWELD" AND THAT THE "COMPARATIVE TABULATION" ON PAGE 3 OF YOUR LETTER "IS BASED PURELY ON HYPOTHETICAL ESTIMATES.' WE HAVE NOT CONSIDERED THESE ALLEGATIONS BECAUSE THE ADOPTION OF SPECIFICATIONS IN LINE WITH THE COMMENTS HEREINABOVE WILL ELIMINATE WHATEVER IMPROPER INSTRUCTIONS WITH RESPECT TO THE USE OF GLASWELD DO EXIST AND THE MATTER OF COMPARATIVE COSTS IN THE MANNER SET OUT IN YOUR LETTER MAY NOT BECOME A DECISIVE FACTOR IN FUTURE CASES BUT IF SUCH BE THE CASE, WE FEEL THAT THE PROTESTING BIDDER SHOULD PRESENT ITS VERSION OF THE FACTS TO THE CONTRACTING OFFICE FOR CONSIDERATION.