FAR 25.101—General.
Plain-English Summary
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.
Key Rules
Two-part domestic test
A manufactured end product is domestic only if it is manufactured in the United States and meets the applicable domestic content threshold. For most products, domestic components must exceed the stated percentage of total component cost, with the threshold increasing over time for items delivered in later calendar years.
Iron and steel products
If an end product consists wholly or predominantly of iron or steel, a different test applies: the cost of foreign iron and steel must be less than 5 percent of the cost of all components. This category has a narrower COTS waiver, which does not apply except for COTS fasteners.
COTS waiver for most products
The domestic content test is waived for COTS items under the cited statutory authority, but that waiver does not extend to the iron-and-steel category except for COTS fasteners. This means many commercial items can be treated more flexibly, but not all metal-heavy products.
Small business set-asides still covered
The Buy American statute applies to small business set-asides. A small business manufactured product is a U.S.-made end product, but it is not automatically a domestic end product unless it also satisfies the domestic content test.
Foreign end product exceptions
Foreign end products may be purchased only when an exception in FAR 25.103 applies. The unreasonable cost exception is implemented through an evaluation factor applied to low foreign offers that are otherwise ineligible, not as a preference among foreign offers.
Threshold increases over time
For contracts spanning the phased threshold increases, the default rule is that each item must meet the threshold in effect for its year of delivery. A senior procurement executive may authorize use of the threshold in effect at award for the entire contract, but only after consulting the Made in America Office.
Alternate clause instructions
When an alternate domestic content test is authorized, the contracting officer must use the appropriate alternate clause under FAR 25.1101 and, for simplified acquisitions using FAR 52.213-4, must use the specified fill-in instead of inserting FAR 52.225-1 Alternate I.
Responsibilities
Contracting Officer
Apply the correct domestic content test, identify whether the item is a manufactured end product or an iron-and-steel product, determine whether a COTS waiver applies, and use the proper solicitation and contract clauses. The contracting officer must also apply the correct exception analysis for foreign end products and follow the special instructions when an alternate domestic content test has been authorized.
Senior Procurement Executive
May authorize an alternate domestic content test for a contract that spans threshold increases, allowing the award-date threshold to apply for the full period of performance. This authority is not delegable, and the senior procurement executive must consult the Made in America Office before granting approval.
Contractor
Provide products that meet the applicable domestic content requirements when claiming domestic status, and be prepared to support manufacturing location and component-cost representations. Contractors on small business set-asides should not assume that small business status alone makes a product a domestic end product.
Agency
Implement the Buy American statute consistently, ensure solicitations and awards reflect the correct threshold and clause structure, and apply exceptions only when authorized. Agencies must also follow the consultation and approval process before using an alternate domestic content test.
Made in America Office
Provide consultation to the senior procurement executive before an alternate domestic content test may be approved for a contract spanning threshold increases.
Practical Implications
Contractors should track where products are manufactured and where components come from, because both the place of manufacture and the component-cost test matter for domestic status.
The phased increase in domestic content thresholds can change compliance mid-contract, so long-term contracts need careful delivery-year planning unless an alternate test is approved.
Do not assume COTS status solves every Buy American issue; iron-and-steel products have a narrower waiver and still require special attention.
Small business set-asides do not eliminate Buy American requirements, so a small business offer can still be noncompliant if it fails the domestic content test.
When a foreign product is being considered, the contracting officer must rely on a specific exception and, for unreasonable cost, apply the evaluation factor correctly rather than simply comparing foreign offers to each other.
Official Regulatory Text
(a) The Buy American statute restricts the purchase of supplies that are not domestic end products. For manufactured end products, the Buy American statute, E.O. 13881, and E.O. 14005 use a two-part test to define a domestic end product. (1) The article must be manufactured in the United States; and (2) (i) Except for an end product that consists wholly or predominantly of iron or steel or a combination of both, the cost of domestic components shall exceed 60 percent of the cost of all the components, except that the percentage will be 65 percent for items delivered in calendar years 2024 through 2028 and 75 percent for items delivered starting in calendar year 2029. But see paragraph (d) of this section. In accordance with 41 U.S.C. 1907 , this domestic content test of the Buy American statute has been waived for acquisitions of COTS items (see 12.505 (a)) (but see paragraph (a)(2)(ii) of this section). (ii) For an end product that consists wholly or predominantly of iron or steel or a combination of both, the cost of foreign iron and steel must constitute less than 5 percent of the cost of all the components used in the end product (see the definition of "foreign iron and steel" at 25.003 ). The cost of foreign iron and steel includes but is not limited to the cost of foreign iron or steel mill products (such as bar, billet, slab, wire, plate, or sheet), castings, or forgings utilized in the manufacture of the end product and a good faith estimate of the cost of all foreign iron or steel components excluding COTS fasteners. This domestic content test of the Buy American statute has not been waived for acquisitions of COTS items in this category, except for COTS fasteners. (b) The Buy American statute applies to small business set-asides. A manufactured product of a small business concern is a U.S.-made end product, but is not a domestic end product unless it meets the domestic content test in paragraph (a)(2) of this section. (c) Exceptions that allow the purchase of a foreign end product are listed at 25.103 . The unreasonable cost exception is implemented through the use of an evaluation factor applied to low foreign offers that are not eligible offers. The evaluation factor is not used to provide a preference for one foreign offer over another. Evaluation procedures and examples are provided in subpart 25.5 . (d) (1) A contract with a period of performance that spans the schedule of domestic content threshold increases specified in paragraph (a)(2)(i) of this section shall be required to comply with each increased threshold for the items in the year of delivery, unless the senior procurement executive of the contracting agency allows for application of an alternate domestic content test for that contract under which the domestic content threshold in effect at time of contract award will apply to the entire period of performance for the contract. This authority is not delegable. The senior procurement executive shall consult the Office of Management and Budget's Made in America Office before allowing the use of the alternate domestic content test. (2) When a senior procurement executive allows for application of an alternate domestic content test for a contract— (i) See 25.1101 (a)(1)(ii) or 25.1101 (b)(1)(v) for use of the appropriate Alternate clause to reflect the domestic content threshold that will apply to the entire period of performance for that contract; and (ii) Use the fill-in at 52.213-4 (b)(1)(xviii)(B) instead of including 52.225-1 Alternate I when using 52.213-4 , Terms and Conditions—Simplified Acquisitions (Other Than Commercial Products and Commercial Services).