FAR 25.103—Exceptions.
Plain-English Summary
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.
Key Rules
Public interest exception
The head of the agency may determine that applying domestic preference would be inconsistent with the public interest. This exception can also apply when an agency has a foreign-government agreement that creates a blanket exception to the Buy American statute.
Nonavailability of domestic supply
The Buy American statute does not apply when the needed articles, materials, or supplies are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of satisfactory quality. This can apply to end items or components.
Class determinations for listed items
FAR 25.104 contains a list of items already determined to be nonavailable as a class, but that determination can be revisited if domestic sources are found to be available in sufficient quantity and quality. Agencies must conduct appropriate market research before buying listed items and must use the proper Buy American provisions and clauses.
Individual nonavailability determinations
The head of the contracting activity may determine that a specific article, material, or supply is nonavailable. If the contracting officer believes the item may affect future acquisitions, the determination and supporting documentation may be sent for possible addition to the FAR 25.104 list.
No written determination in limited cases
A written nonavailability determination is not required if the acquisition used full and open competition, was properly synopsized, and no domestic end product was received. This is a narrow procedural shortcut, not a general waiver.
Unreasonable cost exception
The contracting officer may buy a foreign end product when the domestic end product would be unreasonably costly, but only in accordance with FAR 25.106 and subpart 25.5. This exception is tied to the price evaluation rules, not a free-standing judgment.
Commissary resale exception
Foreign end products may be purchased specifically for commissary resale. This exception recognizes the resale function of commissaries and allows foreign items for that purpose.
Commercial IT with later-year funds
The Buy American restriction does not apply to information technology that is a commercial product when using fiscal year 2004 or later funds, based on the cited appropriations authority and similar later provisions.
Responsibilities
Head of Agency
May make a public interest determination that domestic preference is inconsistent with the public interest, including where a foreign-government agreement provides a blanket exception to the Buy American statute.
Head of the Contracting Activity
May make an individual determination that a specific article, material, or supply is not available domestically in sufficient and reasonably available commercial quantities of satisfactory quality.
Contracting Officer
May acquire a foreign end product when an exception applies; must ensure the correct Buy American provision and clause are included in the solicitation; must state in the solicitation when a listed article is available domestically and that foreign components of the same class or kind may not be treated as domestic; must apply the unreasonable cost rules in FAR 25.106 and subpart 25.5; may submit nonavailability determinations and supporting documentation for possible addition to the FAR 25.104 list.
Procuring Agency
Must conduct market research appropriate to the circumstances before acquiring a listed article, including seeking domestic sources, and must do so for acquisitions of the item as an end product or as a significant component valued at more than 50 percent of the value of all components.
Offerors and Contractors
Must respond based on the solicitation’s Buy American requirements and may not treat foreign components of the same class or kind as domestic components when the solicitation states that the article is domestically available.
Appropriate Council identified in FAR 1.201-1
May receive supporting documentation from agencies for possible removal of an article from the nonavailability list or for possible addition to the list, in accordance with agency procedures.
Practical Implications
Contracting officers should identify the exception early, because the solicitation provisions, clauses, and evaluation approach depend on which exception applies.
Nonavailability is not just a paperwork exercise: agencies are expected to do real market research, and a listed item can lose its nonavailability status if domestic supply is shown to be adequate.
The unreasonable cost exception must be applied through the specific FAR price evaluation framework; treating it as a general discretion to buy foreign products is a common mistake.
For listed nonavailable items, the solicitation must clearly tell offerors how the item is being treated and must not allow foreign components of the same class or kind to be counted as domestic.
The commercial IT exception is funding-sensitive, so users should verify the fiscal year of the funds before relying on it.
When an exception is used repeatedly or appears likely to affect future buys, agencies should consider updating the FAR 25.104 list so future procurements are handled consistently.
Official Regulatory Text
When one of the following exceptions applies, the contracting officer may acquire a foreign end product without regard to the restrictions of the Buy American statute: (a) Public interest. The head of the agency may make a determination that domestic preference would be inconsistent with the public interest. This exception applies when an agency has an agreement with a foreign government that provides a blanket exception to the Buy American statute. (b) Nonavailability . The Buy American statute does not apply with respect to articles, materials, or supplies if articles, materials, or supplies of the class or kind to be acquired, either as end items or components, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality. (1) Class determinations . (i) A nonavailability determination has been made for the articles listed in 25.104 . This determination does not necessarily mean that there is no domestic source for the listed items, but that domestic sources can only meet 50 percent or less of total U.S. Government and nongovernment demand. (ii) Before acquisition of an article on the list, the procuring agency is responsible to conduct market research appropriate to the circumstances, including seeking of domestic sources. This applies to acquisition of an article as- (A) An end product; or (B) A significant component (valued at more than 50 percent of the value of all the components). (iii) The determination in paragraph (b)(1)(i) of this section does not apply if the contracting officer learns at any time before the time designated for receipt of bids in sealed bidding or final offers in negotiation that an article on the list is available domestically in sufficient and reasonably available commercial quantities of a satisfactory quality to meet the requirements of the solicitation. The contracting officer must- (A) Ensure that the appropriate Buy American statute provision and clause are included in the solicitation (see 25.1101 (a), 25.1101 (b), or 25.1102 ); (B) Specify in the solicitation that the article is available domestically and that offerors and contractors may not treat foreign components of the same class or kind as domestic components; and (C) Submit a copy of supporting documentation to the appropriate council identified in 1.201-1 , in accordance with agency procedures, for possible removal of the article from the list. (2) Individual determinations. (i) The head of the contracting activity may make a determination that an article, material, or supply is not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality. A determination is not required before January 1, 2030, if there is an offer for a foreign end product that exceeds 55 percent domestic content (see 25.106 (b)(2) and 25.106 (c)(2)). (ii) If the contracting officer considers that the nonavailability of an article is likely to affect future acquisitions, the contracting officer may submit a copy of the determination and supporting documentation to the appropriate council identified in 1.201-1 , in accordance with agency procedures, for possible addition to the list in 25.104 . (3) A written determination is not required if all of the following conditions are present: (i) The acquisition was conducted through use of full and open competition. (ii) The acquisition was synopsized in accordance with 5.201 . (iii) No offer for a domestic end product was received. (c) Unreasonable cost . The contracting officer may determine that the cost of a domestic end product would be unreasonable, in accordance with 25.106 and subpart 25.5 . (d) Resale . The contracting officer may purchase foreign end products specifically for commissary resale. (e) Information technology that is a commercial product. The restriction on purchasing foreign end products does not apply to the acquisition of information technology that is a commercial product, when using fiscal year 2004 or subsequent fiscal year funds (section 535(a) of Division F, Title V, Consolidated Appropriations Act, 2004, and similar sections in subsequent appropriations acts).