FAR 25.1—Subpart 25.1

Scope of subpart.

FAR 25.100 defines the scope of Subpart 25.1, which is the part of the FAR that implements the Buy American statute and related presidential directives and statutory exceptions. Specifically, it ties the subpart to 41 U.S.C. chapter 83 (Buy American), Executive Order 10582, Executive Order 13881, Executive Order 14005, and the statutory waiver for commercially available off-the-shelf (COTS) items under 41 U.S.C. 1907, while noting the limitation in 25.101(a)(2)(ii). It also explains when the subpart applies to supplies acquired for use in the United States, including supplies bought under small business set-asides and the supply portion of service contracts that include furnishing supplies, such as leases. In practice, this section tells contracting officers when Buy American requirements must be considered and when they do not apply, based on the type of acquisition, the place of use, and the dollar threshold. It is the gateway provision for determining whether domestic preference rules must be applied before award.

General.

FAR 25.101 explains the basic Buy American framework for supplies and manufactured end products. It covers the definition of a domestic end product, the two-part domestic content test for manufactured products, the special rule for end products made wholly or predominantly of iron or steel, the treatment of commercial products and commercial off-the-shelf (COTS) items, the application of the Buy American statute to small business set-asides, the use of exceptions for foreign end products, the unreasonable cost evaluation factor, and the special rules for contracts whose performance spans the domestic content threshold increases. It also addresses when a senior procurement executive may authorize an alternate domestic content test, the requirement to consult the Made in America Office, and the related clause-selection instructions for standard and simplified acquisitions. In practice, this section tells contracting officers how to determine whether a product qualifies as domestic, when a foreign product may still be purchased, and how to handle contracts that cross the phased-in threshold dates. For contractors, it signals what manufacturing and component-cost information may be needed to qualify products as domestic and what to expect in solicitations and contract clauses.

Policy.

FAR 25.102 states the basic Buy American policy for federal acquisitions: for public use inside the United States, agencies are to acquire only domestic end products unless an exception in FAR 25.103 applies. In practice, this section sets the default sourcing rule for supplies and end items purchased by the Government for use in the United States, and it establishes the starting point for evaluating whether a product qualifies as domestic. Its purpose is to favor U.S.-made products in federal procurement, support domestic industry, and ensure contracting decisions follow the statutory and regulatory preference structure. The section is short, but it is foundational because it tells contracting officers and contractors that foreign end products are generally not acceptable unless a listed exception or waiver applies. It also signals that the real work happens in the surrounding Buy American framework, including determining whether an item is a domestic end product and whether an exception under FAR 25.103 permits a foreign product. For contractors, this means supply chain and country-of-origin compliance must be addressed early; for contracting officers, it means the solicitation and award decision must reflect the domestic preference unless an exception is properly documented.

Exceptions.

FAR 25.103 explains when the Buy American statute does not bar the acquisition of foreign end products. It covers five exception paths: public interest determinations, nonavailability, unreasonable cost, commissary resale, and information technology that is a commercial product purchased with fiscal year 2004 or later funds. The section also explains how nonavailability works both as a class determination for items on the FAR 25.104 list and as an individual determination for specific articles, including when market research is required, when a written determination is not required, and when supporting documentation should be sent for possible list updates. In practice, this section gives contracting officers the legal basis to buy foreign items when domestic preference would not make sense, would be too costly, or is otherwise exempted by statute or policy. It also places important process obligations on agencies and contracting officers to document the basis for the exception, use the correct solicitation provisions and clauses, and keep the nonavailability list current when market conditions change.

Nonavailable articles.

FAR 25.104 identifies specific articles that the Government has already determined to be “nonavailable” for purposes of the Buy American statute and related domestic preference rules in FAR Part 25. In practice, this means these listed items are treated as not reasonably available from domestic sources, so they may be exempt from the domestic source restrictions when the applicable FAR provision or clause relies on the nonavailability determination in 25.103(b)(1)(i). The section covers a long, item-by-item list of commodities and products, including certain metals and minerals, agricultural products, fibers, chemicals, books and printed materials, spare parts for foreign-made equipment, and other specialized items such as quartz crystals, raw silk, and cobra venom. It also explains that the list is not static: it must be published in the Federal Register for public comment at least every five years, and anyone may submit recommendations to delete items from the list if they provide enough data and rationale. For contracting officers, this section is a key reference point when evaluating whether a domestic preference exception applies; for contractors, it signals which items may be eligible for foreign sourcing without violating domestic preference requirements, subject to the rest of the procurement rules and any applicable clause language.

Critical components and critical items.

FAR 25.105 addresses the Government’s list of articles that have been designated as critical components or critical items and the preference factors associated with those articles. It explains that the list is maintained in the regulation, that some entries may be reserved, and that the list must be published in the Federal Register for public comment at least once every four years. The section also allows anyone to submit unsolicited recommendations to delete items from the list, provided the submission includes enough data and rationale for evaluation under FAR 1.502. In practice, this section matters because the critical-component/critical-item designation affects how the Government evaluates the reasonableness of cost for domestic end products under FAR 25.106(c). Contractors need to know whether their products contain listed items, and contracting personnel need to apply the preference factors correctly when performing cost reasonableness analysis.

Determining reasonableness of cost.

FAR 25.106 explains how contracting officers determine whether the cost of domestic offers is reasonable when applying Buy American evaluation preferences. It covers the required evaluation factors for comparing domestic and foreign offers, the special treatment for end products that are not critical items and do not contain critical components, the separate rules for critical items and end products containing critical components, the treatment of foreign end products with more than 55 percent domestic content, the interaction with small business set-asides, and the limits on using these factors when a trade agreement applies. It also points to the evaluation procedures in subpart 25.5 and incorporates the additional preference factors listed in FAR 25.105 for critical items and products containing critical components. In practice, this section tells the contracting officer how to “price in” the Buy American preference so that domestic offers are not rejected simply because they are higher than the low foreign offer before the statutory preference is applied. It is a price-reasonableness tool, not a separate responsibility determination or a substitute for the underlying Buy American and trade agreement coverage analysis. The section is especially important because it can change which offer is considered reasonable, affect award decisions in small business set-asides, and, for certain non-COTS foreign products, will sunset on January 1, 2030.

Waiver of right to examination of records.

FAR 25.1001 explains when the Government may waive the normal right to examine contractor records in contracts with foreign contractors, foreign governments, or agencies of foreign governments. It ties that waiver to the audit-and-records clauses at 52.215-2 and 52.212-5, which implement statutory authority under 10 U.S.C. 3841 and 41 U.S.C. 4706. The section tells contracting officers to include the basic clause whenever possible, but allows use of the alternate clause only after reasonable efforts to obtain the basic clause have failed, relevant business factors have been weighed, and the agency head has made a formal determination and findings (D&F). It also explains when Comptroller General concurrence is required and when it is not, including cases where the contractor is a foreign government or is legally barred by local law from making records available. In practice, this section is about balancing audit rights against foreign procurement realities, while ensuring the Government documents why it is giving up or limiting access to records.

Use of foreign currency.

FAR 25.1002 explains how contracting officers handle foreign currency in solicitations and contracts performed outside the United States. It covers three main topics: when the solicitation must require a specific currency, when offers may be submitted in a different currency, how to evaluate offers fairly when multiple currencies are allowed, and how to protect the government from currency fluctuation risk when a contract is priced in foreign currency. The rule recognizes that international agreements or the WTO Government Procurement Agreement may require use of a particular currency, but otherwise leaves the contracting officer discretion to choose U.S. dollars or a foreign currency for the solicitation. It also requires a consistent conversion method using current market exchange rates from a commonly used source, tied to the relevant bid opening or proposal receipt date depending on the acquisition method. Finally, it requires agencies to ensure enough funds are available to absorb exchange-rate changes so the contract does not create an Anti-Deficiency Act problem. In practice, this section is about currency planning, fair price comparison, and fiscal control in overseas acquisitions.

Tax on certain foreign procurements.

FAR 25.1003 is a cross-reference provision that tells readers where to find the rules for the tax on certain foreign procurements. It does not itself impose the tax or restate the detailed requirements; instead, it points contracting officers and contractors to FAR 29.204, which implements the tax under the James Zadroga 9/11 Health and Compensation Act of 2010, 26 U.S.C. 5000C, and the Treasury regulations at 26 CFR 1.5000C-1 through 1.5000C-7. In practical terms, this section matters because it alerts acquisition personnel that some foreign procurements may be subject to a federal excise-type tax and that the operative rules are found outside Part 25. The section is important for compliance planning, solicitation preparation, pricing, invoicing, and contract administration whenever a procurement involves foreign persons, foreign entities, or other transactions covered by the statute and regulations. It also helps prevent misapplication of the rule by directing users to the specific FAR and tax-code authorities that govern whether the tax applies, how it is collected, and what exceptions or procedures may be available.

Acquisition of supplies.

FAR 25.1101 tells contracting officers which domestic-preference and trade-related provisions and clauses must be included when buying supplies, or services that involve furnishing supplies. It covers the Buy American-Supplies clause and certificate, the Buy American-Free Trade Agreements-Israeli Trade Act clause and certificate, the Trade Agreements clause and certificate, the civil aircraft waiver provision, the Duty-Free Entry clause, and the Place of Manufacture provision. The section also ties clause selection to dollar thresholds, the place of use of the supplies, whether the acquisition is restricted to domestic end products, whether a Buy American exception applies, whether the WTO GPA or other trade agreements apply, and whether the acquisition is for commercial IT funded by FY 2004 or later funds. It further addresses use of alternate clauses and provisions to reflect changing domestic content thresholds over time, including the senior procurement executive’s authorization of an alternate domestic content test. In practice, this section is a clause-selection roadmap: it helps the contracting officer determine which solicitation and contract language must be inserted so the competition, certification, evaluation, and post-award administration all align with the applicable domestic sourcing and trade rules.

Acquisition of construction.

FAR 25.1102 tells contracting officers which Buy American Act and trade agreements clauses and notices to use when acquiring construction, and how those prescriptions change based on where the work will be performed, the estimated dollar value, whether the acquisition is subject to trade agreements, whether the agency has approved a higher evaluation percentage, whether an alternate domestic content test applies, and whether Recovery Act funds are being used. It covers the basic Buy American-Construction Materials clause and notice for lower-value U.S. construction, the Buy American-Construction Materials under Trade Agreements clause and notice for higher-value U.S. construction, the use of alternates to reflect insufficient time for a waiver/inapplicability determination, and the special Recovery Act provisions and clauses that replace the normal ones when Recovery Act funds are used. It also addresses how to list excepted foreign construction materials in the clauses, including special treatment for designated country construction material and the Bahrain, Mexico, and Oman exception for certain acquisitions. In practice, this section is a clause-selection roadmap: the contracting officer must match the solicitation and contract language to the funding source, estimated value, and applicable domestic content rules, while contractors must understand which materials are restricted, which exceptions may apply, and how the solicitation will evaluate offers. The section is important because using the wrong clause, alternate, or threshold can make a solicitation noncompliant, affect evaluation, or create post-award performance problems.

Other provisions and clauses.

FAR 25.1103 tells contracting officers which additional foreign-related provisions and clauses must be included in solicitations and contracts, and when those clauses apply. It covers five specific topics: the clause for restrictions on certain foreign purchases at 52.225-13, the clause for inconsistency between an English version and a translation at 52.225-14, the provision for evaluating foreign currency offers at 52.225-17, the Sudan certification provision at 52.225-20 for acquisitions other than commercial products or commercial services, and the Iran representation and certification provision at 52.225-25 in all solicitations. In practice, this section is a checklist for acquisition planning and solicitation drafting whenever foreign sourcing, translation, foreign currency, or sanctions-related issues may arise. Its purpose is to ensure solicitations and contracts contain the correct trade, language, and sanctions provisions so the Government can evaluate offers properly, avoid ambiguity in multilingual contracting, and comply with statutory restrictions on foreign purchases and dealings with certain countries or entities. For contractors, the section matters because these clauses can affect eligibility, representations, pricing, and contract interpretation. For contracting officers, it is a mandatory inclusion rule that must be applied carefully based on the acquisition type and anticipated circumstances.