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The Buy American Act of 1933 requires the federal government to purchase iron, steel, and industrial products made in the United States to the extent possible. A product is defined as manufactured in the United States under «Buy American» if at least 50% of its components and/or materials originate in the United States. Since 1933, several additions have been made to this policy, and a number of policies, procedures and jurisprudence have been developed. Federal contractors had to work within this framework. In addition, the Surface Transportation Assistance Act of 1982 adopted a separate policy known as «Buy America.» It regulates contracts financed by the Ministry of Transport, such as the construction of highways, bridges, railways and transits. A product is defined under «Buy America» as being manufactured in America if all of its manufacturing processes, components and/or materials originate in the United States. In 2009, the American Recovery and Reinvestment Act created another standard that applied to all recovery act projects (direct federal assistance). This new Recovery Act standard differs from the others in that it replaces the other two requirements where they would normally apply, establishes a new definition of American Made, and applies the requirement to sectors of the construction market that have never had to meet any of the previous requirements. The criterion used to determine the country of origin of a final product under the Buy American Act (see the different country definitions of «final product» in 25,003) is different from the test used to determine the country of origin of a final product under trade agreements or the criteria for reporting finished products manufactured outside the United States (see 25,004). Under trade agreements, the criterion for determining the country of origin is «substantial transformation» Article 1605 applies to the construction, alteration, maintenance or repair of a public building or public works. For direct federal work, the regulatory definitions in FAR 22.401 define «public building or public works» as buildings or works the construction, monitoring, completion or repair of which is carried out directly by the agency or with funds from a federal agency to serve the interests of the general public, whether the title of the public is in a federal agency. The exemption allows a ready-to-use commercial item (COTS) to be treated as a domestic final product if it is manufactured in the United States without tracking the origin of the components of the item.

Exceptions that allow the purchase of a foreign final product are listed under FAR 25.103 and DFARS 225. For federal relief work, public construction and public labor refers to a public building and public labor of a government agency (United States; the District of Columbia; Commonwealths, territories and small islands far from the United States; state and local governments; , multi-state, regional or inter-state entities that have governmental functions). Such buildings and works may include, but are not limited to, bridges, dams, facilities, highways, boardways, roads, subways, tunnels, sewers, main lines, power lines, pumping stations, heavy generators, railways, airports, terminals, wharves, wharves, railways, lighthouses, buoys, jetties, breakwaters and canals, as well as the construction, modification, maintenance or repair of these buildings and works for federal and federal emergency work, Test of the «essential transformation» applied. Manufactured property means a good that is brought to the construction site to be incorporated into the building or work that has been created. As required by 25.1101(a)(1), the following clause should be inserted: The Buy American Act contains separate provisions for supply and manufacturing contracts and applies to set-aside for small businesses. Unreasonable costs. Whether the purchase of the equipment in Canada would impose unreasonable costs on the government. The exception for unreasonable costs is implemented using an evaluation factor applied to weak foreign bids.

Customer may determine disproportionate costs in accordance with FAR 25.105 / Subsection 25.5 and DFARS 225.105 / Subsection 225.5. However, the DOD issued a final rule that amended DFARS 252.225-7000 and 252.225-7001 and the clause that includes a partial waiver of the two-part test. Direct federal work is subject to the Federal Procurement Regulations (FAR) and, as such, a stand-alone FAR case has been developed for the implementation of section 1605 for projects purchased directly by the federal government.