Supplying Principles and Practices > USPS Supplying Practices Process Step 2: Evaluate Sources > Evaluate Foreign and Domestic Proposals

Evaluate Foreign and Domestic Proposals

Proposals offering other than domestic end products or (subject to the eligibility thresholds set out below in Figure 2.14) end products mined, produced, or manufactured in (i) countries that have entered into World Trade Organization Government Procurement Agreement (WTO GPA) or (ii) a country that has entered into a Free Trade Agreement (FTA) with the United States covering government purchases, will be evaluated in one of two ways against proposals of relatively equal value offering domestic end products or eligible WTO GPA or FTA country end products. This evaluation will depend on whether contract award will be based on price or on evaluation factors other than price. When an award will be based on price, a six percent differential is applied to the proposed price of the non-qualifying end product, and this adjusted price is used by the Proposal Evaluation Team and the Contracting Officer in the course of evaluation. If proposal evaluation factors will have a significant weight in proposal evaluation, domestic and WTO GPA or FTA end products will receive a preference in the case of closely ranked proposals, but no price differential will be applied.

Domestic End Products

A domestic end product is:

1. An unmanufactured end product mined or produced in the United States; or

2. An end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds fifty percent of the cost of all its components. Components (i.e., articles, materials, supply incorporated directly into an end product or construction material) of foreign origin of the same class or kind as those that the Postal Service determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic. Cost of components refers to:

• For components purchased by the Supplier, the purchase cost, including transportation costs to the place of incorporation into the end product or construction material (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

• For components manufactured by the Supplier, all costs associated with the manufacture of the component, including transportation costs as described above, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product.

When a request for proposals (RFP) specifies that an award will be made on a group of line items, a domestic proposal means a proposal where the proposed price of the domestic end products exceeds fifty percent of the total proposed price of the group.

End Products from Designated WTO GPA and FTA Countries

End products from a designated WTO GPA or FTA country are those articles, materials, and supplies that:

1. Are wholly the growth, product, or manufacture of producers in (i) countries that have entered into World Trade Organization Government Procurement Agreement (WTO GPA) or (ii) a country that has entered into a Free Trade Agreement (FTA) with the United States covering government purchasing; or

2. In the case of articles that consist in whole or in part of materials from another country, have been substantially transformed in a WTO GPA or FTA country into new and different articles of commerce with names, characters, or uses distinct from that of the article or articles from which they were transformed.

An end product refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product, includes services (except transportation services) incidental to the article, provided that the value of those incidental services do not exceed that of the article itself.

Designated WTO GPA and FTA Countries

The following are the designated WTO GPA and FTA countries:

• WTO GPA countries: Aruba, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, and United Kingdom; construction materials and end products granted duty-free entry: Antigua and Barbuda, The Bahamas, Barbados, Belize, Costa Rica, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Haiti, Honduras, Jamaica, Montserrat, Netherlands Antilles, Saint Christopher-Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago, and Virgin Islands (British)

• FTA countries: Australia, Canada, Chile, Israel, Mexico, Morocco, and Singapore

WTO GPA and FTA Eligibility Thresholds

The value of the purchase and the type of commodity being purchased are determining factors as to whether the WTO GTA and FTA products may be considered domestic-source end products. The thresholds are summarized in the table below. Estimated contract value includes the value of any contemplated options.

Figure 2.14

Eligibility Thresholds

When proposals contain end products produced in eligible designated WTO GPA and FTA countries, and the value of the purchase exceeds the amount shown above, the end products are considered as domestic-source end products.

Lease, Rental, and Lease-Purchase Contracts

To determine whether the purchase of products by lease, rental, or lease-purchase contract (including lease-to-ownership, or lease-with-option-to purchase) is covered by the WTO GPA or an FTA, calculate the estimated purchase value as follows:

• If a fixed-term contract of 12 months or less is contemplated, use the total estimated value of the purchase

• If a fixed-term contract of more than 12 months is contemplated, use the total estimated value of the purchase plus the estimated residual value of the leased equipment at the conclusion of the contemplated term of the contract

• If an indefinite delivery contract is contemplated, use the estimated monthly payment multiplied by the total number of months that ordering would be possible under the proposed contract (i.e., the initial ordering period plus any optional ordering periods)

• If there is any doubt as to the contemplated term of the contract, use the estimated monthly payment multiplied by 48

WTO GPA and FTA Service Exceptions

Purchases of the following services are excluded from coverage as indicated in the table below:

Figure 2.15

Excluded Purchases

Construction Materials

The procedures in this part apply to all construction contracts. Deviations may be authorized by the Vice President, Supply Management (VP, SM). For the purposes of this practice, the following definitions apply:

• Construction material components are articles, materials, and supplies incorporated directly into construction materials.

• Construction materials are articles, materials, and supplies brought to the construction site for incorporation into the building or work.

• Domestic construction material is (1) an unmanufactured construction material mined or produced in the United States, or (2) a construction material manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds fifty percent of the cost of all its components. The cost of each component includes transportation costs to the place of incorporation into the construction material and any applicable duty (whether or not a duty-free entry certificate is issued). Components of foreign origin of the same class or kind as those listed in Non-Available Products (subsection to this practices) are treated as domestic.

• Foreign construction material is a construction material other than a domestic construction material.

Only domestic construction materials may be used in construction, except:

• When the Contracting Officer determines that use of a particular domestic construction material would be impracticable, or that its cost would be unreasonable, under guidelines established by the VP, Supply Management, in the relevant handbook

• When the VP, SM, determines that a construction material is not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of satisfactory quality (see Non-Available Products)

Provision 1-3: Domestic Source Certificate - Construction Materials is incorporated by reference in Provision 4-3, and must be checked-off by Contracting Officers when the request for proposals (RFP) calls for the purchase of construction materials. Clause 1-10: Preference for Domestic Construction Materials is incorporated by reference in Clause 4-2, and must be checked-off by Contracting Officers when the contract calls for the purchase of construction materials.

Limitations

This practice does not apply to products set out in the list of Non-Available Products below or to purchases as to which the Vice President, Supply Management (VP, SM), has determined that the application of a domestic preference would be inconsistent with the public interest.

Non-Available Products

Acetylene, black.

Agar, bulk.

Anise.

Antimony, as metal or oxide.

Asbestos, amosite, chrysotile, and crocidolite.

Bamboo shoots.

Bananas.

Bauxite.

Beef, corned, canned.

Beef extract.

Bephenium hydroxynapthoate.

Bismuth.

Books, trade, text, technical, or scientific; newspapers; pamphlets; magazines; periodicals; printed briefs and films; not printed in the United States and for which domestic editions are not available.

Brazil nuts, unroasted.

Cadmium, ores and flue dust.

Calcium cyanamide.

Capers.

Cashew nuts.

Castor beans and castor oil.

Chalk, English.

Chestnuts.

Chicle.

Chrome ore or chromite.

Cinchona bark.

Cobalt, in cathodes, rondelles, or other primary ore and metal forms.

Cocoa beans.

Coconut and coconut meat, unsweetened, in shredded, desiccated, or similarly prepared form.

Coffee, raw or green bean.

Colchicine alkaloid, raw.

Copra.

Cork, wood or bark and waste.

Cover glass, microscope slide.

Crane rail (85-pound per foot).

Cryolite, natural.

Dammar gum.

Diamonds, industrial, stones and abrasives.

Emetine, bulk.

Ergot, crude.

Erythrityl tetranitrate.

Fair linen, altar.

Fibers of the following types: abaca, abace, agave, coir, flax, jute, jute burlaps, palmyra, and sisal.

Goat and kidskins.

Goat hair canvas.

Grapefruit sections, canned.

Graphite, natural, crystalline, crucible grade.

Hand file sets (Swiss pattern).

Handsewing needles.

Hemp yarn.

Hog bristles for brushes.

Hyoscine, bulk.

Ipecac, root.

Iodine, crude.

Kaurigum.

Lac.

Leather, sheepskin, hair type.

Lavender oil.

Manganese.

Menthol, natural bulk.

Mica.

Microprocessor chips (brought onto a government construction site as separate units for incorporation into building systems during construction or repair and alteration of real property).

Modacrylic fur ruff.

Nickel, primary, in ingots, pigs, shots, cathodes, or similar forms; nickel oxide and nickel salts.

Nitroguanidine (also known as picrite).

Nux vomica, crude.

Oiticica oil.

Olive oil.

Olives (green), pitted or unpitted, or stuffed, in bulk.

Opium, crude.

Oranges, mandarin, canned.

Petroleum, crude oil, unfinished oils, and finished products.

Pine needle oil.

Platinum and related group metals, refined, as sponge, powder, ingots, or cast bars.

Pyrethrum flowers.

Quartz crystals.

Quebracho.

Quinidine.

Quinine.

Rabbit fur felt.

Radium salts, source and special nuclear materials.

Rosettes.

Rubber, crude and latex.

Rutile.

Santonin, crude.

Secretin.

Shellac.

Silk, raw and unmanufactured.

Spare and replacement parts for equipment of foreign manufacture, and for which domestic parts are not available.

Spices and herbs, in bulk.

Sugars, raw.

Swords and scabbards.

Talc, block, steatite.

Tantalum.

Tapioca flour and cassava.

Tartar, crude; tartaric acid and cream of tartar in bulk.

Tea in bulk.

Thread, metallic (gold).

Thyme oil.

Tin in bars, blocks, and pigs.

Triprolidine hydrochloride.

Tungsten.

Vanilla beans.

Venom, cobra.

Water chestnuts.

Wax, carnauba.

Wire glass.

Woods; logs, veneer, and lumber of the following species: Alaskan yellow cedar, angelique, balsa, ekki, greenheart, lignum vitae, mahogany, and teak.

Yarn, 50 Denier rayon.

Other Topics Considered

Conduct Market Research and Benchmarking Analysis topic, Decide on Make vs. Buy task, Process Step 1: Identify Needs

Review and Finalize Request for Proposals (RFP) topic, Perform Solicitation-Related Activities task, Process Step 2: Evaluate Sources