FAR 25.206—Noncompliance.
Plain-English Summary
FAR 25.206 explains what the contracting officer must do when there are allegations or evidence that a contractor or subcontractor used foreign construction material without authorization in violation of the Buy American statute. It covers the required review of allegations, the notice-and-response process when fraud is not suspected, and the range of corrective and enforcement actions available if noncompliance is confirmed. The section also addresses when the contracting officer may decide that removal and replacement of the foreign material is impracticable or not in the Government’s interest, while making clear that such a decision is not the same as finding a Buy American exception applies. It further preserves the Government’s rights to pursue other remedies, including price reduction, termination for default, suspension or debarment referrals, and criminal or fraud-related referrals when appropriate. In practice, this section is the enforcement and response framework for Buy American violations involving construction materials, balancing correction of the violation with protection of the Government’s contractual and integrity interests.
Key Rules
Review all allegations
The contracting officer must review allegations that the Buy American statute has been violated. This is the required first step before deciding whether any corrective or enforcement action is warranted.
Notify contractor absent fraud
Unless fraud is suspected, the contracting officer must notify the contractor of the apparent unauthorized use of foreign construction material and request a reply. The contractor’s response should include proposed corrective action.
Determine appropriate action
If the review confirms unauthorized use of foreign construction material by the contractor or subcontractor, the contracting officer must take appropriate action. The available actions include one or more of the remedies listed in the rule, depending on the facts and severity of the violation.
Process inapplicability determination
One possible response is to process a determination that the Buy American statute is inapplicable under FAR 25.205. This is only appropriate when the facts support an applicable exception or inapplicability determination.
Consider removal and replacement
The contracting officer may require removal and replacement of the unauthorized foreign construction material. This is a corrective remedy aimed at restoring compliance with the contract’s domestic preference requirements.
Document retention decision
If removal and replacement would be impracticable, cause undue delay, or otherwise harm the Government’s interests, the contracting officer may decide in writing that the material need not be removed and replaced. The written determination must state that retaining the material is not a finding that a Buy American exception applies.
Preserve other remedies
A decision to retain the material does not limit the Government’s other rights and remedies. The contracting officer may still reduce the contract price, terminate for default, or pursue suspension and debarment actions.
Escalate serious or fraudulent cases
If the noncompliance is sufficiently serious, the contracting officer should consider default termination and referral to the agency suspending and debarring official. If the conduct appears fraudulent, the matter must be referred to the appropriate agency officials, including criminal investigation personnel when applicable.
Responsibilities
Contracting Officer
Review allegations of Buy American violations; notify the contractor and request a response when fraud is not suspected; evaluate the facts and decide on appropriate corrective or enforcement action; document any decision to retain foreign construction material; and consider remedies, suspension/debarment referrals, or fraud referrals as warranted.
Contractor
Respond to the contracting officer’s notice with an explanation and proposed corrective action; address unauthorized foreign construction material use; and comply with any required corrective measures, including removal and replacement if directed.
Subcontractor
Avoid unauthorized use of foreign construction material and, if implicated in a violation, may be subject to corrective action, contract remedies, and suspension or debarment consequences through the prime contractor and Government enforcement processes.
Agency Suspending and Debarring Official
Receive and evaluate referrals when noncompliance is serious enough to warrant possible suspension or debarment action under subpart 9.4.
Agency Criminal Investigation/Appropriate Officials
Receive referrals when the noncompliance appears fraudulent and determine whether criminal or other investigative action is appropriate.
Practical Implications
This section gives contracting officers a step-by-step response path, so they should document the allegation, the contractor’s reply, the factual findings, and the rationale for any remedy chosen.
A common pitfall is treating a decision to keep the foreign material as if it were an approved Buy American exception; the written determination must clearly say it is not.
Contractors should not assume that avoiding removal and replacement ends the matter, because the Government can still seek price reductions, default termination, or suspension and debarment.
Fraud indicators change the process: if fraud is suspected, the contracting officer should not simply follow the normal notice-and-reply approach and should elevate the matter promptly.
Because subcontractor conduct can trigger prime contract consequences, primes need strong supply-chain controls and material traceability for construction projects subject to Buy American requirements.
Official Regulatory Text
The contracting officer must- (a) Review allegations of Buy American statute violations; (b) Unless fraud is suspected, notify the contractor of the apparent unauthorized use of foreign construction material and request a reply, to include proposed corrective action; and (c) If the review reveals that a contractor or subcontractor has used foreign construction material without authorization, take appropriate action, including one or more of the following: (1) Process a determination concerning the inapplicability of the Buy American statute in accordance with 25.205 . (2) Consider requiring the removal and replacement of the unauthorized foreign construction material. (3) If removal and replacement of foreign construction material incorporated in a building or work would be impracticable, cause undue delay, or otherwise be detrimental to the interests of the Government, the contracting officer may determine in writing that the foreign construction material need not be removed and replaced. A determination to retain foreign construction material does not constitute a determination that an exception to the Buy American statute applies, and this should be stated in the determination. Further, a determination to retain foreign construction material does not affect the Government’s right to suspend or debar a contractor, subcontractor, or supplier for violation of the Buy American statute, or to exercise other contractual rights and remedies, such as reducing the contract price or terminating the contract for default. (4) If the noncompliance is sufficiently serious, consider exercising appropriate contractual remedies, such as terminating the contract for default. Also consider preparing and forwarding a report to the agency suspending and debarring official in accordance with subpart 9.4 . If the noncompliance appears to be fraudulent, refer the matter to other appropriate agency officials, such as the officer responsible for criminal investigation.