FAR 25.607—Noncompliance.
Plain-English Summary
FAR 25.607 tells the contracting officer what to do when there is a possible or actual violation of the Buy American statute or section 1605 of the Recovery Act involving foreign construction material. It covers how to review allegations of noncompliance, when to notify the contractor and request a response, and what corrective or enforcement actions may follow if unauthorized foreign construction material was used. The section also addresses the option to process a formal inapplicability determination under FAR 25.606, whether to require removal and replacement of the material, and when the contracting officer may decide in writing to allow the material to remain because removal would be impracticable, cause undue delay, or harm the Government’s interests. It makes clear that a decision to retain the material is not the same as finding an exception applies, and it preserves the Government’s rights to suspend or debar, reduce the contract price, or terminate for default. Finally, it requires the contracting officer to consider more serious remedies, including default termination and referral to the suspension and debarment official, and to refer suspected fraud to the appropriate investigative or inspector general officials. In practice, this section is the enforcement roadmap for Buy American/Recovery Act noncompliance on construction contracts.
Key Rules
Review Allegations Promptly
The contracting officer must review any allegation that section 1605 of the Recovery Act or the Buy American statute was violated. This is the first step in determining whether foreign construction material was used without authorization and what corrective action is appropriate.
Notify Contractor Unless Fraud Suspected
If fraud is not suspected, the contracting officer must notify the contractor of the apparent unauthorized use of foreign construction material and request a response, including proposed corrective action. This gives the contractor an opportunity to explain the facts and propose a remedy before stronger action is taken.
Use FAR 25.606 When Applicable
If the review shows the material may be covered by an exception or otherwise not subject to the restriction, the contracting officer may process a determination of inapplicability under FAR 25.606. This is the formal path for deciding whether the statute actually applies to the material at issue.
Consider Removal and Replacement
The contracting officer may require the unauthorized foreign construction material to be removed and replaced. This is a common corrective measure when the material can be replaced without unreasonable disruption or harm to the project.
Written Retention Determination
If removal and replacement would be impracticable, cause undue delay, or otherwise be detrimental to the Government, the contracting officer may decide in writing that the material need not be removed and replaced. The determination must state that retaining the material is not a finding that an exception to the statute applies.
Preserve Other Government Remedies
A decision to keep the material in place does not limit the Government’s right to suspend or debar the contractor, subcontractor, or supplier, or to use other contractual remedies such as price reduction or default termination. The retention decision is separate from enforcement and accountability actions.
Escalate Serious or Fraudulent Cases
If the noncompliance is serious, the contracting officer must consider remedies such as termination for default and referral to the agency suspending and debarring official. If the conduct appears fraudulent, the matter must be referred to the appropriate investigative officials, such as the inspector general or criminal investigative authority.
Responsibilities
Contracting Officer
Review allegations of Buy American or Recovery Act violations; notify the contractor and request a response when fraud is not suspected; determine whether FAR 25.606 applies; decide whether to require removal and replacement; issue a written retention determination when appropriate; consider default termination and suspension/debarment referral for serious cases; and refer suspected fraud to investigative officials.
Contractor
Respond to the contracting officer’s notice of apparent unauthorized use of foreign construction material and propose corrective action. If noncompliance is confirmed, the contractor may be required to remove and replace the material and may face contractual and administrative consequences.
Subcontractor or Supplier
Avoid supplying unauthorized foreign construction material and may be subject to suspension or debarment or other consequences if involved in the violation. Their conduct can trigger the same enforcement review even if the prime contractor is the direct contract holder.
Agency Suspending and Debarring Official
Receive reports of serious noncompliance when the contracting officer believes suspension or debarment should be considered. This official evaluates whether administrative exclusion action is warranted.
Inspector General or Criminal Investigative Official
Receive referrals when the noncompliance appears fraudulent and investigate potential misconduct, false statements, or other criminal or administrative violations.
Practical Implications
Contracting officers should document the facts carefully, because the section requires a review, a response opportunity, and a reasoned decision on corrective action or retention.
Contractors should treat any notice of apparent unauthorized foreign construction material as urgent and provide a factual response with a concrete corrective-action proposal.
A decision to leave the material in place is not a safe harbor; the Government can still pursue price reductions, default termination, suspension/debarment, or other remedies.
The distinction between a true statutory exception and a practical decision to retain material matters, and the written determination must say that retention does not equal an exception.
Fraud changes the process: if the issue looks intentional or deceptive, the contracting officer should escalate to investigative channels rather than handling it only as a contract administration matter.
Official Regulatory Text
The contracting officer must- (a) Review allegations of violations of section 1605 of the Recovery Act or Buy American statute; (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 section 1605 of the Recovery Act or the Buy American statute in accordance with 25.606 . (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 section 1605 of the Recovery Act or 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 section 1605 of the Recovery Act or 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 agency’s inspector general or the officer responsible for criminal investigation.