FAR 25.1002—Use of foreign currency.
Plain-English Summary
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.
Key Rules
Determine the solicitation currency
For contracts to be entered into and performed outside the United States, the contracting officer must decide whether offers will be submitted in U.S. currency or in a specified foreign currency, unless an international agreement or the WTO GPA requires a particular currency. In unusual circumstances, the contracting officer may allow offers in a currency other than the one specified.
Keep pricing in one currency
Solicitations generally should require all offers to be priced in the same currency so the government can compare them fairly. Allowing mixed currencies is the exception, not the norm, because it complicates evaluation and increases the risk of inconsistent comparisons.
Convert foreign offers for evaluation
If the solicitation allows offers in a currency other than the specified currency, the contracting officer must convert those prices to U.S. currency for evaluation. The conversion must use the current market exchange rate from a commonly used source.
Use the correct exchange-rate date
For sealed bidding, the exchange rate is taken on the date of bid opening. For negotiated acquisitions, the date depends on the evaluation method: use the date set for receipt of offers if award is based on initial offers, or the date set for receipt of final proposal revisions if award is based on those revisions.
Protect against currency fluctuation
If a contract is priced in foreign currency, the agency must ensure that enough funds are available to cover exchange-rate changes. This is required to avoid violating the Anti-Deficiency Act.
Responsibilities
Contracting Officer
Decide whether the solicitation will require U.S. currency or a specified foreign currency for overseas performance, unless an international agreement or the WTO GPA controls. If allowing another currency, ensure all offers are evaluated fairly by converting prices to U.S. currency using the proper exchange rate and date.
Agency
Ensure that sufficient funds are available when a contract is priced in foreign currency so exchange-rate movements do not cause a funding shortfall or an Anti-Deficiency Act violation.
Offerors/Contractors
Submit prices in the currency required by the solicitation, or in another permitted currency if the solicitation allows it. If pricing in foreign currency is permitted, contractors should understand that evaluation will still be converted to U.S. dollars for comparison purposes.
Source Selection/Evaluation Team
Apply the required conversion method consistently across all offers so the evaluation is fair and based on the correct exchange rate and date.
Practical Implications
Currency choice should be addressed early in acquisition planning for overseas work; waiting until solicitation release can create avoidable evaluation and funding problems.
Allowing multiple currencies can make pricing comparisons more complex and can create disputes if the solicitation does not clearly explain the conversion method.
The exchange-rate date matters: using the wrong date can distort the evaluated price and undermine the integrity of the competition.
If the contract itself is priced in foreign currency, the agency must budget for exchange-rate movement, not just the nominal contract amount.
A common pitfall is assuming foreign-currency pricing is only an accounting issue; in reality, it can affect competition, award decisions, and statutory fiscal compliance.
Official Regulatory Text
(a) Unless an international agreement or the WTO GPA (see 25.408 (a)(4)) requires a specific currency, contracting officers must determine whether solicitations for contracts to be entered into and performed outside the United States will require submission of offers in U.S. currency or a specified foreign currency. In unusual circumstances, the contracting officer may permit submission of offers in other than a specified currency. (b) To ensure a fair evaluation of offers, solicitations generally should require all offers to be priced in the same currency. However, if the solicitation permits submission of offers in other than a specified currency, the contracting officer must convert the offered prices to U.S. currency for evaluation purposes. The contracting officer must use the current market exchange rate from a commonly used source in effect as follows: (1) For acquisitions conducted using sealed bidding procedures, on the date of bid opening. (2) For acquisitions conducted using negotiation procedures- (i) On the date specified for receipt of offers, if award is based on initial offers; otherwise (ii) On the date specified for receipt of final proposal revisions. (c) If a contract is priced in foreign currency, the agency must ensure that adequate funds are available to cover currency fluctuations to avoid a violation of the Anti-Deficiency Act (31 U.S.C. 1341, 1342, 1511-1519).