FAR 25.504-2—WTO GPA/Caribbean Basin Trade Initiative/FTAs.
Plain-English Summary
FAR 25.504-2 explains how to evaluate offers when an acquisition is subject to the World Trade Organization Government Procurement Agreement (WTO GPA), the Caribbean Basin Trade Initiative, or a free trade agreement (FTA). It tells contracting officers how to compare eligible products, U.S.-made end products, and noneligible products, and when certain offers must be eliminated from consideration. The section also addresses the special treatment of U.S.-made end products that are not domestic offers, including the rule that if the agency gives eligible offers the same consideration as those U.S.-made end products, the contracting officer does not need to determine whether the U.S.-made end products are domestic for large or small business purposes. In practice, this section is about applying trade agreement evaluation preferences correctly so the government does not improperly reject protected foreign products or misapply domestic-preference rules. It matters because the wrong evaluation method can change the apparent low offer, affect award decisions, and create compliance risk under international trade obligations and the FAR’s trade agreement procedures.
Key Rules
Apply trade agreement coverage
When the acquisition is covered by the WTO GPA, Caribbean Basin Trade Initiative, or an FTA, the contracting officer must evaluate offers under the trade agreement rules in FAR Part 25 rather than treating all foreign products the same. Coverage determines which products are eligible for consideration and which may be excluded.
Eliminate noneligible products when required
If the acquisition is covered and there is an offer of a U.S.-made end product or an eligible product, noneligible products are eliminated from the competition. This prevents award to a product that does not qualify under the applicable trade agreement rules.
Award to the low remaining offer
After eliminating noneligible products, award is made to the lowest-priced remaining offer that is eligible under the applicable rules. The example shows award going to the low remaining eligible product after the noneligible offer is removed.
No domestic-status determination may be needed
If the agency gives eligible offers the same consideration it gives to U.S.-made end products that are not domestic offers, the contracting officer does not need to determine whether those U.S.-made end products are domestic for large or small business purposes. This simplifies evaluation when the agency’s treatment of those offers is equivalent.
Use the specific FAR cross-references
The section directs the evaluator to FAR 25.502(b)(1) for eliminating noneligible products and FAR 25.502(b)(2) for awarding to the low remaining offer. Those cross-references control the mechanics of the evaluation and should be followed exactly.
Responsibilities
Contracting Officer
Determine whether the acquisition is covered by the WTO GPA, Caribbean Basin Trade Initiative, or an FTA; identify eligible, U.S.-made, and noneligible offers; eliminate noneligible products when the rule applies; and award to the lowest-priced remaining eligible offer. The contracting officer must also decide whether a domestic-status determination is necessary or can be avoided under the agency’s evaluation approach.
Agency
Apply the correct trade agreement evaluation policy and ensure solicitations and evaluations reflect the applicable trade agreement coverage. The agency must also ensure its evaluation method gives the required consideration to eligible offers and any U.S.-made end products treated similarly.
Offeror/Contractor
Submit accurate product origin and eligibility information so the government can classify the offer correctly under the applicable trade agreement rules. Contractors should understand whether their offered end products are eligible, U.S.-made, or noneligible because that status affects whether their offer remains in the competition.
Practical Implications
This section can change who is actually in line for award, because a noneligible low price may be removed from consideration once trade agreement rules are applied.
Contracting officers should not assume every foreign-made product is automatically excluded; the key question is whether the product is eligible under the applicable agreement.
A common pitfall is failing to recognize that the agency may not need a separate domestic/non-domestic determination for U.S.-made end products if eligible offers receive the same treatment.
Solicitations and evaluation worksheets should clearly reflect the trade agreement basis for the decision, since the wrong evaluation method can lead to protest risk or an improper award.
Offerors should be careful to identify product origin and eligibility correctly, because a misclassified offer may be eliminated even if it appears low priced.
Official Regulatory Text
Example 1 . Offer A $304,000 U.S.-made end product (not domestic) Offer B $303,000 U.S.-made end product (domestic), small business Offer C $300,000 Eligible product Offer D $295,000 Noneligible product (not U.S.-made) Analysis : Eliminate Offer D because the acquisition is covered by the WTO GPA and there is an offer of a U.S.-made or an eligible product (see 25.502 (b)(1)). If the agency gives the same consideration given eligible offers to offers of U.S.-made end products that are not domestic offers, it is unnecessary to determine if U.S.-made end products are domestic (large or small business). No further analysis is necessary. Award on the low remaining offer, Offer C (see 25.502 (b)(2)).