{"data":{"id":"us/7-cfr-appendix-a-to-part-1787","jurisdiction":"us","citation":"7 CFR Appendix A to Part 1787","heading":"Appendix A to Part 1787—Product Procurement","body":"This appendix shows an example of how the 6 percent differential is applied to determine award of a bid. In response to a request for bids for a digital central office a borrower receives four responsive bids to the specification, three domestic bids and one nondomestic bid. The nondomestic bid is the apparent low bid. We will consider in our analysis the nondomestic bid and the lowest domestic bid as shown in the following table.\nNondomestic bid Domestic bid\nTotal materials $895,000 $920,000\nInstallation 155,000 177,000\nFreight +1,000 +1,500\nTotal bid $1,051,000 $1,098,500\nPlease note that once the product has been determined as nondomestic, the 6 percent cost differential shall be applied to all the material content in the nondomestic bid, even if the nondomestic product includes domestic components.\nIn this example, 6 percent of the total material content in the nondomestic bid ($895,000) equals $53,700. This cost differential is added to the total nondomestic bid as shown in the following table.\nTotal of the nondomestic bid $1,051,000\n6% of the all material cost +53,000\nTotal evaluated bid $1,104,700\nThis total evaluated bid, (that is the nondomestic bid plus the 6% of the cost of its material content), is compared with all the domestic bids for award of the bid. In our example the domestic bid ($1,098,500) is lower than the nondomestic evaluated bid ($1,104,700).\nThe domestic bid becomes the low bid and the domestic bidder gets award of the bid. This product is classified as domestic since the cost of the domestic components used in the product constitutes more than 50 percent of the cost of all the components used.","path":["Title 7—Agriculture","Subtitle B—Regulations of the Department of Agriculture","CHAPTER XVII—RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE","PART 1787—THE “BUY AMERICAN” REQUIREMENT"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-7.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:01Z","sha256":"4d019f81c9f8a653df58f3f0b80b3fa5a90b786e93e086b306903f09bd97653b","source_id":"us-cfr","stale":true,"prev":"us/7-cfr-1787.14","next":"us/7-cfr-1788.1"},"notice":"GroundRules: Original legal text. Not legal advice."}