FAR 25.204—Evaluating offers of foreign construction material.
Plain-English Summary
FAR 25.204 explains how contracting officers must evaluate offers that propose foreign construction material and how offerors can support those proposals. It covers the information offerors must submit when seeking an exception to the Buy American statute, the price evaluation adjustments the contracting officer must apply, special treatment for construction material that is not a critical item and does not contain critical components, and a separate, stricter evaluation rule for critical items or materials containing critical components. It also addresses the temporary domestic-content-based evaluation procedure for certain non-COTS, non-iron/steel materials that exceed 55 percent domestic content, with a sunset date of January 1, 2030. In addition, it allows alternate offers using equivalent domestic construction material to reduce the risk of rejection if the foreign-material exception does not apply, and it requires the contracting officer to update the contract clause list when an award is made to an offeror proposing foreign construction material not already listed in the solicitation. In practice, this section is about how foreign construction material is priced, compared, and documented during source selection so the Government can apply Buy American preferences consistently and transparently.
Key Rules
Submit required exception data
If an offeror proposes foreign construction material not already listed in the applicable solicitation clause, the offeror must provide the information required by the relevant clause provisions. This gives the contracting officer the data needed to decide whether an exception applies and how to evaluate the offer.
Apply 20 percent evaluation factor
For noncritical construction material that is not a critical item and does not contain critical components, the contracting officer generally adds 20 percent of the cost of the foreign construction material to the offered price when the offeror seeks an exception based on unreasonable domestic cost. The agency head may set a higher percentage, and in a tie the Government must prefer the offer without foreign material excepted on unreasonable-cost grounds.
Special rule for certain 55 percent domestic-content offers
For certain non-COTS construction material that is not wholly or predominantly iron or steel, if the normal evaluation produces an unreasonable-cost result or there is no domestic offer, and the low foreign offer does not exceed 55 percent domestic content, the contracting officer must treat the lowest qualifying U.S.-manufactured offer as domestic and evaluate its reasonableness against the low offer. This special procedure ends on January 1, 2030.
Higher preference for critical items
For critical items or construction material containing critical components, the contracting officer must add 20 percent plus any additional preference factor listed in FAR 25.105 when evaluating foreign material proposed for exception based on unreasonable domestic cost. Ties still go to the offer without foreign material excepted on unreasonable-cost grounds.
Critical-item 55 percent rule
The same temporary 55 percent domestic-content procedure applies to certain non-COTS, non-iron/steel materials involving critical items or critical components, but the contracting officer uses the evaluation factors in paragraph (b)(2). This procedure also sunsets on January 1, 2030.
Alternate domestic offers allowed
Offerors may submit alternate offers based on equivalent domestic construction material. This helps avoid rejection of the entire offer if the Government later determines that the requested foreign-material exception does not apply.
Update contract clause list
If award is made to an offeror that proposed foreign construction material not listed in the solicitation clause, the contracting officer must add those excepted materials to the contract clause list. This keeps the contract record aligned with the approved foreign-material exception.
Responsibilities
Offeror
Identify any proposed foreign construction material that is not already listed in the solicitation clause and submit the required supporting information under the applicable clause. Offerors may also submit alternate offers using equivalent domestic construction material to preserve competitiveness if the foreign-material exception is denied.
Contracting Officer
Evaluate foreign construction material offers using the required price adjustments and preference rules, including the 20 percent factor and any additional factor for critical items or critical components. The contracting officer must also apply the special 55 percent domestic-content procedures when applicable, resolve ties in favor of the domestic-preferred offer, and update the contract clause list after award when unlisted foreign material is approved.
Head of the Agency
May specify a higher percentage than the default 20 percent evaluation factor for noncritical foreign construction material exceptions based on unreasonable domestic cost. This authority affects how strongly foreign material is penalized in evaluation.
Government/Agency
Use the evaluation framework to compare offers consistently, determine whether exceptions to the Buy American statute are justified, and ensure the contract file and clause list reflect any approved foreign construction material.
Practical Implications
Offerors cannot assume foreign construction material will be accepted just because it is cheaper; the evaluation adds a price penalty that can erase the apparent savings.
The distinction between ordinary material and critical items or critical components matters a lot, because critical items face a higher evaluation penalty and therefore a tougher path to award.
The temporary 55 percent domestic-content procedure can change the evaluation outcome for certain non-COTS, non-iron/steel materials, so contractors should verify whether their product fits that narrow category and remember the rule expires on January 1, 2030.
Submitting an alternate domestic offer can be a smart risk-management strategy when the foreign-material exception is uncertain.
Contracting officers should be careful to document the basis for any exception, apply the correct evaluation factor, and update the contract clause list after award; mistakes here can create protest risk, compliance issues, or an inaccurate contract record.
Official Regulatory Text
(a) Offerors proposing to use foreign construction material other than that listed by the Government in the applicable clause at 52.225-9 , paragraph (b)(2), or 52.225-11 , paragraph (b)(3), or covered by the WTO GPA or a Free Trade Agreement (paragraph (b)(2) of 52.225-11 ), must provide the information required by paragraphs (c) and (d) of the respective clauses. (b) (1) For construction material that is not a critical item and does not contain critical components . (i) Unless the head of the agency specifies a higher percentage, the contracting officer shall add to the offered price 20 percent of the cost of any foreign construction material proposed for exception from the requirements of the Buy American statute based on the unreasonable cost of domestic construction materials. In the case of a tie, the contracting officer shall give preference to an offer that does not include foreign construction material excepted at the request of the offeror on the basis of unreasonable cost. (ii) For construction material that is not a COTS item and does not consist wholly or predominantly of iron or steel or a combination of both, if the procedures in paragraph (b)(1)(i) of this section result in an unreasonable cost determination for the domestic construction material offer or there is no domestic construction material offer received, and the low offer is for foreign construction material that does not exceed 55 percent domestic content, the contracting officer shall— (A) Treat the lowest offer of foreign construction material that is manufactured in the United States and exceeds 55 percent domestic content as a domestic offer; and (B) Determine the reasonableness of the cost of this offer by applying the evaluation factor listed in paragraph (b)(1)(i) to the low offer. (iii) The procedures in paragraph (b)(1)(ii) of this section will no longer apply as of January 1, 2030. (2) For construction material that is a critical item or contains critical components . (i) The contracting officer shall add to the offered price 20 percent, plus the additional preference factor identified for the critical item or construction material containing critical components listed at section 25.105 , of the cost of any foreign construction material proposed for exception from the requirements of the Buy American statute based on the unreasonable cost of domestic construction materials. In the case of a tie, the contracting officer shall give preference to an offer that does not include foreign construction material excepted at the request of the offeror on the basis of unreasonable cost. See 25.105 for the list of critical components and critical items. (ii) For construction material that is not a COTS item and does not consist wholly or predominantly of iron or steel or a combination of both, if the procedures in paragraph (b)(2)(i) of this section result in an unreasonable cost determination for the domestic construction material offer or there is no domestic construction material offer received, and the low offer is for foreign construction material that does not exceed 55 percent domestic content, the contracting officer shall— (A) Treat the lowest offer of foreign construction material that is manufactured in the United States and exceeds 55 percent domestic content as a domestic offer; and (B) Determine the reasonableness of the cost of this offer by applying the evaluation factors listed in this paragraph (b)(2) to the low offer. (iii) The procedures in paragraph (b)(2)(ii) of this section will no longer apply as of January 1, 2030. (c) Offerors also may submit alternate offers based on use of equivalent domestic construction material to avoid possible rejection of the entire offer if the Government determines that an exception permitting use of a particular foreign construction material does not apply. (d) If the contracting officer awards a contract to an offeror that proposed foreign construction material not listed in the applicable clause in the solicitation (paragraph (b)(2) of 52.225-9 , or paragraph (b)(3) of 52.225-11 ), the contracting officer must add the excepted materials to the list in the contract clause.