B-153806, MAY 20, 1964

B-153806: May 20, 1964

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IT IS STATED THAT THE PROPOSED NEW SUBPART (FPR 1-6.1) WOULD LARGELY REFLECT THE EXISTING PRACTICES UNDER THE BUY AMERICAN ACT PROCEDURES WHICH ARE NOT PRESENTLY COVERED BY THE FPR. PROCURE DOMESTIC MATERIALS UNLESS THE DELIVERED COST OF DOMESTIC MATERIALS IS ESTIMATED TO BE 50 PERCENT GREATER THAN THE COST OF LIKE MATERIALS OF FOREIGN ORIGIN. AID IS EXPECTED TO FOLLOW THIS POLICY ON ITS ADMINISTRATIVE PROCUREMENT ONLY. ITIS SUGGESTED THAT AGENCIES GENERALLY FOLLOW THE DEFINITION OF "DOMESTIC PRODUCT" WHICH IS PROVIDED IN EXECUTIVE ORDER 10582. ALTHOUGH IT IS RECOGNIZED THAT SOME FLEXIBILITY IN THE USE OF THIS DEFINITION MAY BE WARRANTED IN EXCEPTIONAL CIRCUMSTANCES.'. THIS RECOMMENDATION IS TO BE APPROPRIATELY IMPLEMENTED FOR INCLUSION IN THE FPR.

B-153806, MAY 20, 1964

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

BY LETTER DATED MARCH 19, 1964, WITH ENCLOSURES, THE ASSISTANT GENERAL COUNSEL, REGULATIONS AND GENERAL LAW DIVISION, REQUESTED OUR COMMENTS ON A PROPOSED REVISION TO THE FEDERAL PROCUREMENT REGULATIONS (FPR) WHICH WOULD IMPLEMENT THE BUY AMERICAN ACT AND EXECUTIVE ORDER 10582, AS AMENDED, WITH RESPECT TO SUPPLY AND SERVICE CONTRACTS. IT IS STATED THAT THE PROPOSED NEW SUBPART (FPR 1-6.1) WOULD LARGELY REFLECT THE EXISTING PRACTICES UNDER THE BUY AMERICAN ACT PROCEDURES WHICH ARE NOT PRESENTLY COVERED BY THE FPR.

THIS PROPOSAL REFLECTS THE RECOMMENDATION OF THE CABINET COMMITTEE ON BALANCE OF PAYMENTS, AS REPORTED IN A MARCH 3, 1964, LETTER FROM THE DIRECTOR, BUREAU OF THE BUDGET, TO YOU, THAT THERE BE "NO CHANGE AT THIS TIME IN EXECUTIVE ORDER 10582, AS AMENDED, OR IN AGENCY PRACTICES UNDER THE ORDER.'

THE CABINET COMMITTEE ALSO RECOMMENDED AS FOLLOWS:

". . . WITH THE EXCEPTION OF AID, ALL FEDERAL AGENCIES PROCURING FOR USE ABROAD SHOULD, IN GENERAL, PROCURE DOMESTIC MATERIALS UNLESS THE DELIVERED COST OF DOMESTIC MATERIALS IS ESTIMATED TO BE 50 PERCENT GREATER THAN THE COST OF LIKE MATERIALS OF FOREIGN ORIGIN. AID IS EXPECTED TO FOLLOW THIS POLICY ON ITS ADMINISTRATIVE PROCUREMENT ONLY, CONTINUING ITS MORE RESTRICTIVE BUYING POLICIES ON OTHER PROCUREMENT. FOR PURPOSES OF CARRYING OUT THIS DECISION ON PROCUREMENT FOR USE ABROAD, ITIS SUGGESTED THAT AGENCIES GENERALLY FOLLOW THE DEFINITION OF "DOMESTIC PRODUCT" WHICH IS PROVIDED IN EXECUTIVE ORDER 10582, ALTHOUGH IT IS RECOGNIZED THAT SOME FLEXIBILITY IN THE USE OF THIS DEFINITION MAY BE WARRANTED IN EXCEPTIONAL CIRCUMSTANCES.'

THIS RECOMMENDATION IS TO BE APPROPRIATELY IMPLEMENTED FOR INCLUSION IN THE FPR.

WE ARE NOT AWARE OF ANY SUBSTANTIAL REASONS WHY THE REGULATIONS SHOULD NOT BE REVISED AS PROPOSED. IN THIS CONNECTION, WE NOTE THAT THE PROPOSED REVISION IS SIMILAR TO ASPR, SECTION 6, REVISION 4, DATED MARCH 6, 1964. THEREFORE, WE HAVE NO OBJECTION TO THE PROPOSED REVISION.