Bureau of Reclamation:

Misapplication of the Buy American Act

NSIAD-90-32: Published: Nov 8, 1989. Publicly Released: Nov 8, 1989.

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Pursuant to a congressional request, GAO reviewed a Bureau of Reclamation contract award to determine whether it complied with the Buy American Act.

GAO found that: (1) the act prohibited the use of foreign construction materials for public construction work done in the United States; (2) the solicitation for the prime contract allowed the use of foreign construction materials only if they were listed separately and were clearly lower in price after adding a price differential; (3) both the government and private-sector officials responsible for awarding the prime contract and subcontracts confused the act's requirements for determining construction material origin; (4) the Bureau improperly included the costs of domestic labor to attach parts to imported products and manufacturing overhead and general and administrative expenses in the domestic component costs; and (5) the Bureau should have required that the prime contractor use domestic products, since the awardee's domestic component costs fell below 50 percent of the total subcontract costs after exclusion of the two improperly added costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Bureau of Reclamation issued RAM-90-40, December 27, 1989, supplementing and clarifying guidance on Buy American Act implementation and determinations on what constitutes a "domestic" supplier. Interior also restated policy with a copy of the GAO report to its contracting activities.

    Recommendation: To ensure that all future procurements are made properly, the Bureau of Reclamation's Division of Acquisition and Assistance should issue guidance for its contracting personnel and prospective bidders on the proper application of the Buy American Act's requirements for determining: (1) whether a bid involves materials of domestic origin; and (2) the correct evaluation differential is applied to bids of foreign materials.

    Agency Affected: Department of the Interior: Bureau of Reclamation: Acquisition and Assistance Division

  2. Status: Closed - Implemented

    Comments: The Bureau of Reclamation issued RAM-90-40, December 27, 1989, supplementing and clarifying guidance on Buy American Act implementation and determinations on what constitutes a "domestic" supplier. Interior also restated policy with a copy of the GAO report to its contracting activities.

    Recommendation: To ensure that all future procurements are made properly, the Department of Interior's Office of Acquisition and Property Management should determine whether other Interior organizations need similar guidance.

    Agency Affected: Department of the Interior: Office of Acquisition and Property Management

 

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