FAR 25.603—Exceptions.
Plain-English Summary
FAR 25.603 explains when a contracting officer may permit foreign construction materials despite the normal domestic-preference rules, and what must happen when an exception is used. It covers four main exception bases: nonavailability of a construction material in sufficient and reasonably available commercial quantities of satisfactory quality, unreasonable cost of domestic material, inconsistency with the public interest, and impracticability for unmanufactured construction material under the Buy American statute. It also addresses the required determination and documentation process, including listing excepted materials in the contract and, for Recovery Act projects, publishing a Federal Register notice with specified content and timing. In addition, it ties these exceptions to the trade agreements rules for construction contracts at or above the applicable threshold, and clarifies that Caribbean Basin Countries are not treated as designated countries for purposes of applying section 1605 of the Recovery Act to manufactured construction material. In practice, this section tells contracting officers when they can approve foreign materials, who must make the determination, what paperwork and public notice are required, and how trade agreement coverage affects evaluation of offers.
Key Rules
Nonavailability exception
The head of the contracting activity may determine that a particular construction material is not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of satisfactory quality. If the material is on the FAR 25.104(a) list, the related nonavailability determinations and procedures in 25.103(b)(1) also apply when that article is acquired as a construction material.
Unreasonable cost exception
The contracting officer may allow foreign construction material when the cost of domestic construction material is unreasonable under FAR 25.605. This is a price-based exception, so the officer must use the prescribed cost comparison rules rather than making an informal judgment.
Public interest exception
The head of the agency may determine that applying section 1605 of the Recovery Act to a particular manufactured construction material, or the Buy American statute to a particular unmanufactured construction material, would be inconsistent with the public interest. This is a higher-level policy determination, not a routine contracting officer decision.
Impracticability for unmanufactured material
The head of the agency may also determine that applying the Buy American statute to a particular unmanufactured construction material would be impracticable. This gives the agency a separate basis to waive the domestic preference for that category of material.
Contract listing requirement
When an exception is approved, the contracting officer must identify the excepted foreign construction materials in the contract. This ensures the waiver is clear in the award file and enforceable during performance.
Recovery Act notice requirement
For exceptions to section 1605 of the Recovery Act, unless the material has already been determined domestically nonavailable under the FAR 25.104 list, the head of the agency must publish a Federal Register notice within three business days and send copies to the Administrator for Federal Procurement Policy and the Recovery Accountability and Transparency Board. The notice must include the title, project value and description, and a detailed justification for the waiver.
Trade agreements coverage
For construction contracts with an estimated acquisition value of $6,683,000 or more, the contracting officer must also consider subpart 25.4. Offers using construction material from a designated country must receive equal consideration with offers using domestic construction material.
Caribbean Basin limitation
For purposes of applying section 1605 of the Recovery Act to manufactured construction material, Caribbean Basin Countries are not treated as designated countries. That means they do not receive the same treatment as designated countries under this specific Recovery Act application.
Responsibilities
Contracting Officer
Determine whether an exception applies, including unreasonable cost under FAR 25.605. If an exception is granted, list the excepted foreign construction materials in the contract and ensure the procurement file reflects the basis for the decision.
Head of the Contracting Activity
Make nonavailability determinations for construction materials when the material is not available in sufficient and reasonably available commercial quantities of satisfactory quality. Apply the related nonavailability procedures for listed articles when they are acquired as construction materials.
Head of the Agency
Make public-interest determinations for manufactured construction materials under section 1605 of the Recovery Act and for unmanufactured construction materials under the Buy American statute when application would be inconsistent with the public interest. Also determine impracticability for unmanufactured construction material under the Buy American statute, and issue the required Federal Register notice for Recovery Act waivers.
Agency
For Recovery Act exceptions, publish the required Federal Register notice within three business days, provide copies to the Administrator for Federal Procurement Policy and the Recovery Accountability and Transparency Board, and ensure the notice contains the required title, project information, and detailed justification.
Offerors/Contractors
Submit proposals and furnish construction materials consistent with the solicitation and any approved exceptions. When trade agreements apply, they may propose designated-country construction materials and must receive equal consideration with domestic materials.
Practical Implications
This section is the main escape valve from domestic-preference rules for construction materials, but it is not automatic; the right official must make the right determination before foreign material can be used.
Documentation matters. If the exception is approved, the contract must specifically list the excepted materials, and Recovery Act waivers trigger a fast public notice requirement that can be missed if the team is not tracking deadlines.
The reason for the exception controls who decides. Nonavailability and unreasonable cost are handled differently from public-interest and impracticability determinations, so contracting staff should not assume the contracting officer can approve every waiver.
Trade agreement coverage can change the evaluation framework for larger construction contracts, so acquisition planning must check both the Buy American/Recovery Act rules and subpart 25.4 thresholds.
A common pitfall is confusing designated-country treatment with Recovery Act treatment; Caribbean Basin Countries are not designated countries for section 1605 purposes when evaluating manufactured construction material.
Official Regulatory Text
(a) (1) When one of the following exceptions applies, the contracting officer may allow the contractor to incorporate foreign manufactured construction materials without regard to the restrictions of section 1605 of the Recovery Act or foreign unmanufactured construction material without regard to the restrictions of the Buy American statute: (i) Nonavailability . The head of the contracting activity may determine that a particular construction material is not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality. The determinations of nonavailability of the articles listed at 25.104 (a) and the procedures at 25.103 (b)(1) also apply if any of those articles are acquired as construction materials. (ii) Unreasonable cost . The contracting officer concludes that the cost of domestic construction material is unreasonable in accordance with 25.605 . (iii) Inconsistent with public interest . The head of the agency may determine that application of the restrictions of section 1605 of the Recovery Act to a particular manufactured construction material, or the restrictions of the Buy American statute to a particular unmanufactured construction material would be inconsistent with the public interest. (2) In addition, the head of the agency may determine that application of the Buy American statute to a particular unmanufactured construction material would be impracticable. (b) Determinations . When a determination is made, for any of the reasons stated in this section, that certain foreign construction materials may be used- (1) The contracting officer shall list the excepted materials in the contract; and (2) For determinations with regard to the inapplicability of section 1605 of the Recovery Act, unless the construction material has already been determined to be domestically nonavailable (see list at 25.104 ), the head of the agency shall provide a notice to the Federal Register within three business days after the determination is made, with a copy to the Administrator for Federal Procurement Policy and to the Recovery Accountability and Transparency Board. The notice shall include- (i) The title "Buy American Exception under the American Recovery and Reinvestment Act of 2009"; (ii) The dollar value and brief description of the project; and (iii) A detailed justification as to why the restriction is being waived. (c) Acquisitions under trade agreements . (1) For construction contracts with an estimated acquisition value of $6,683,000 or more, also see subpart 25.4 . Offers proposing the use of construction material from a designated country shall receive equal consideration with offers proposing the use of domestic construction material. (2) For purposes of applying section 1605 of the Recovery Act to evaluation of manufactured construction material, designated countries do not include the Caribbean Basin Countries.