FAR 25.504-3—FTA/Israeli Trade Act.
Plain-English Summary
FAR 25.504-3 provides worked examples showing how the Buy American Act/FTA/Israeli Trade Act evaluation rules are applied when an acquisition is not covered by the WTO Government Procurement Agreement (GPA). The examples explain how to compare domestic end products, eligible products, and noneligible products; when a nonavailability determination is required; and when the contracting officer may award to a noneligible product because no domestic offer is available or because the evaluation-factor rules do not change the outcome. In practice, this section helps contracting officers understand how to evaluate offers in mixed-source competitions and how the presence or absence of domestic and eligible offers affects award decisions. It also shows the interaction between the domestic-preference framework and the exceptions that allow award to foreign or noneligible products under specified conditions. The section is practical guidance, not a separate substantive rule, but it is important because it illustrates the decision path a contracting officer should follow when applying the preference rules in 25.502(c).
Key Rules
Eligible offer wins when lowest
If the lowest-priced offer is an eligible product, award goes to that offer. The example shows that when an eligible product is the low offer, no further domestic-preference adjustment is needed.
Noneligible offer may be considered
When the acquisition is not covered by the WTO GPA, the contracting officer may consider a noneligible offer. This means the offer is not automatically excluded solely because it is noneligible.
Nonavailability when no domestic offer
If no domestic offer is received, the contracting officer must make a nonavailability determination before awarding to a noneligible offer. The example shows that this determination supports award when no domestic end product is available.
Evaluation factor can be bypassed
If an eligible offer is lower than the domestic offer, no evaluation factor is applied to the low noneligible offer in the example. In that situation, the low noneligible offer may still receive award because the domestic-preference adjustment does not change the ranking.
Award to low offer when permitted
Where the rules allow consideration of noneligible products and the evaluation outcome does not favor the domestic offer, award is made to the low offer. The examples illustrate that the final award decision depends on the specific mix of domestic, eligible, and noneligible offers.
Responsibilities
Contracting Officer
Apply the offer-evaluation examples consistently with 25.502(c), determine whether the acquisition is covered by the WTO GPA, decide whether noneligible offers may be considered, make a nonavailability determination when no domestic offer is received, and award to the proper offer based on the evaluation outcome.
Offerors/Contractors
Submit accurate pricing and correctly identify whether their products are domestic end products, eligible products, or noneligible products so the contracting officer can evaluate the offer under the applicable preference rules.
Agency
Ensure procurement personnel understand the domestic-preference framework and maintain procedures for making and documenting nonavailability determinations when required.
Practical Implications
These examples are decision aids for source selection, not standalone rules; the contracting officer still has to apply the underlying regulatory text in 25.502(c).
A common pitfall is assuming all foreign products are barred; this section shows that noneligible products can still be considered in some non-GPA acquisitions.
Another frequent mistake is skipping the nonavailability determination when no domestic offer is received; the example makes clear that documentation matters before award to a noneligible product.
Contracting officers should carefully compare the domestic offer, eligible offer, and noneligible offer after any required evaluation factor is applied, because the lowest nominal price may not be the award winner in every case.
Offerors should not assume that being an eligible product guarantees award if a domestic offer or other evaluated offer remains more advantageous after the applicable preference analysis.
Official Regulatory Text
(a) Example 1 . Offer A $105,000 Domestic end product, small business Offer B $100,000 Eligible product Analysis : Since the low offer is an eligible offer, award on the low offer (see 25.502 (c)(1)). (b) Example 2 . Offer A $105,000 Eligible product Offer B $103,000 Noneligible product Analysis : Since the acquisition is not covered by the WTO GPA, the contracting officer can consider the noneligible offer. Since no domestic offer was received, make a nonavailability determination and award on Offer B (see 25.502 (c)(2)). (c) Example 3 . Offer A $105,000 Domestic end product, large business Offer B $103,000 Eligible product Offer C $100,000 Noneligible product Analysis : Since the acquisition is not covered by the WTO GPA, the contracting officer can consider the noneligible offer. Because the eligible offer (Offer B) is lower than the domestic offer (Offer A), no evaluation factor applies to the low offer (Offer C). Award on the low offer (see 25.502 (c)(3)).