FAR 25.503—Group offers.
Plain-English Summary
FAR 25.503 explains how to evaluate offers when award is restricted to a group of line items or to all line items in the solicitation or offer. It covers four related situations: group awards where prohibited end products or WTO GPA-restricted items are present, group awards where an offeror limits award to a group of line items, group awards under trade agreements when the award decision must be made at the group level, and group awards when no trade agreement applies. The section tells contracting personnel how to determine whether to reject an offer, how to identify the tentative award pattern, how to decide whether an offer is domestic, eligible, or foreign, and when to apply the evaluation factor under FAR 25.502. In practice, this section prevents improper splitting of awards, ensures consistent treatment of line items within grouped awards, and preserves the price evaluation preferences required by Buy American, trade agreement, and other domestic preference rules. It is especially important when a solicitation uses grouped line items, because the evaluation method changes from a line-item-by-line-item comparison to a group-based comparison that can affect both offer acceptability and award outcome.
Key Rules
Reject prohibited group awards
If the solicitation or offer requires award only on a group of line items or all line items, the offer must be rejected if any part of the award would include prohibited end products under subpart 25.7. If the acquisition is covered by the WTO GPA and any part of the offer includes items restricted under 25.403(c), the offer must also be rejected.
Evaluate restricted line-item offers separately
When an offer restricts award to a group of line items or all line items in the offer, the contracting officer must first evaluate unrestricted offers line item by line item to form a tentative award pattern. Then the restricted offer is compared against that pattern using the appropriate evaluation factor on a line-item basis, and award goes to the restricted offer only if its total evaluated price is lower.
Use group-level domestic/foreign determination under trade agreements
If the solicitation requires award only on a group or all line items and a trade agreement applies, the category of end products is determined for each line item, but the decision whether to apply an evaluation factor is made at the group level. If domestic end products exceed 50 percent of the group’s proposed price, the whole group is treated as domestic; otherwise it is treated as foreign.
Treat foreign groups as eligible when threshold is met
For foreign offers under a trade agreement, if domestic end products plus eligible products exceed 50 percent of the group’s proposed price, the entire group is evaluated as an eligible offer. This group-level classification controls how the evaluation factor is applied to the whole group.
Apply evaluation factor to the entire group
When a group award is required, the evaluation factor is applied to the entire group in accordance with FAR 25.502. The rule is not applied line item by line item once the group classification has been made, except as specifically directed by the referenced examples and exceptions.
Use group-level rules when no trade agreement applies
If no trade agreement applies and the solicitation requires award only on a group or all line items, the contracting officer still determines domestic or foreign status by line item, but decides whether to apply the evaluation factor based on the group as a whole. If domestic end products exceed 50 percent of the group’s proposed price, the group is treated as domestic; otherwise it is treated as foreign.
Apply special domestic-content exception when applicable
Under the no-trade-agreement rule, if FAR 25.502(c)(4) applies and the evaluated price of the low offer remains below the lowest domestic offer, a group may be treated as domestic if end products with at least 55 percent domestic content exceed 50 percent of the group’s proposed price. This is a specific exception that can change the evaluation outcome.
Responsibilities
Contracting Officer
Determine whether the solicitation or offer requires award on a group of line items or on all line items, identify whether prohibited end products or WTO GPA-restricted items are present, and reject offers when required by paragraph (a). For grouped awards, build the tentative award pattern, compare restricted offers against that pattern, classify groups as domestic, eligible, or foreign as required, and apply the correct evaluation factor under FAR 25.502.
Offeror/Contractor
Structure the offer consistently with the solicitation’s award basis, disclose any award restriction to a group or to all line items, and ensure offered products do not trigger rejection rules for prohibited end products or WTO GPA-restricted items. The offeror must also understand that group pricing and product composition can affect whether the offer is evaluated as domestic, eligible, or foreign.
Agency/Requirement Owner
Draft the solicitation clearly to state whether award may be made by line item, by group of line items, or only on all line items, because that choice controls the evaluation method. The agency must also ensure the solicitation aligns with applicable trade agreement and domestic preference requirements so evaluators can apply the correct group-based rules.
Evaluation Team
Perform the price evaluation exactly as prescribed, including line-item tentative award pattern analysis, group-level domestic-content determinations, and application of the appropriate evaluation factor. The team must document the basis for classification and award selection so the record shows compliance with FAR 25.503 and the referenced examples.
Practical Implications
This section matters most when a solicitation bundles items together, because the award decision can change from the lowest line-item price to the lowest evaluated group price. Contractors should not assume they can win individual items if the solicitation requires award only as a group or on all line items.
A common pitfall is mixing line-item and group logic. Once the solicitation or offer requires a group award, the evaluator must follow the group rules for classification and evaluation, even though some determinations still start at the line-item level.
Another frequent mistake is overlooking the rejection rules for prohibited end products or WTO GPA-restricted items. If those items are present in a required group award, the offer may be nonresponsive or otherwise unacceptable under the applicable rule.
Offerors should pay close attention to how domestic content is distributed across the group, because the 50 percent threshold can determine whether the whole group is treated as domestic, eligible, or foreign. Small changes in product mix or pricing can change the evaluation result.
Contracting officers should document the tentative award pattern and the application of the evaluation factor carefully, especially where a restricted offer is compared against unrestricted line-item awards. Clear documentation helps defend the award decision and reduces protest risk.
Official Regulatory Text
(a) If the solicitation or an offer specifies that award can be made only on a group of line items or on all line items contained in the solicitation or offer, reject the offer- (1) If any part of the award would consist of prohibited end products (see subpart 25.7 ); or (2) If the acquisition is covered by the WTO GPA and any part of the offer consists of items restricted in accordance with 25.403 (c). (b) If an offer restricts award to a group of line items or to all line items contained in the offer, determine for each line item whether to apply an evaluation factor (see 25.504-4 , Example 1). (1) First, evaluate offers that do not specify an award restriction on a line item basis in accordance with 25.502 , determining a tentative award pattern by selecting for each line item the offer with the lowest evaluated price. (2) Evaluate an offer that specifies an award restriction against the offered prices of the tentative award pattern, applying the appropriate evaluation factor on a line item basis. (3) Compute the total evaluated price for the tentative award pattern and the offer that specified an award restriction. (4) Unless the total evaluated price of the offer that specified an award restriction is less than the total evaluated price of the tentative award pattern, award based on the tentative award pattern. (c) If the solicitation specifies that award will be made only on a group of line items or all line items contained in the solicitation, determine the category of end products on the basis of each line item, but determine whether to apply an evaluation factor on the basis of the group of items (see 25.504-4 , Example 2). (1) If the proposed price of domestic end products exceeds 50 percent of the total proposed price of the group, evaluate the entire group as a domestic offer. Evaluate all other groups as foreign offers. (2) For foreign offers, if the proposed price of domestic end products and eligible products exceeds 50 percent of the total proposed price of the group, evaluate the entire group as an eligible offer. (3) Apply the evaluation factor to the entire group in accordance with 25.502 . (d) If no trade agreement applies to a solicitation and the solicitation specifies that award will be made only on a group of line items or all line items contained in the solicitation, determine the category of end products ( i.e., domestic or foreign) on the basis of each line item, but determine whether to apply an evaluation factor on the basis of the group of items ( see 25.504-4 (c), Example 3). (1) If the proposed price of domestic end products exceeds 50 percent of the total proposed price of the group, evaluate the entire group as a domestic offer. Evaluate all other groups as foreign offers. (2) Apply the evaluation factor to the entire group in accordance with 25.502 , except where 25.502 (c)(4) applies and the evaluated price of the low offer remains less than the lowest domestic offer. Where the evaluated price of the low offer remains less than the lowest domestic offer, treat as a domestic offer any group where the proposed price of end products with a domestic content of at least 55 percent exceeds 50 percent of the total proposed price of the group. (3) Apply the evaluation factor to the entire group in accordance with 25.502 (c)(4).