FAR 25.703-3—Prohibition on contracting with entities that export sensitive technology to Iran.
Plain-English Summary
FAR 25.703-3 implements a statutory restriction aimed at preventing the federal government from doing business with entities that export certain sensitive technology to Iran. The section covers three main topics: the government-wide prohibition on awarding or extending contracts to covered persons, the required offeror representation that it does not export sensitive technology to the Government of Iran or related Iranian entities, and a limited exception for acquisitions subject to trade agreements when the offeror certifies that all offered products are designated country end products or designated country construction material. In practice, this rule is both a responsibility screen and a solicitation certification requirement: contracting officers must avoid contracting with prohibited entities, and offerors must make the required representation unless the trade-agreement exception applies. The section matters because it ties foreign policy and national security concerns directly to source selection and contract administration, and a false or missing representation can affect eligibility for award. It also requires agencies to check SAM exclusion status and to understand when the trade-agreements exception removes the need for the representation.
Key Rules
No contracts with covered exporters
An executive agency may not enter into or extend a contract for goods or services with a person that exports certain sensitive technology to Iran, as determined by the President, and that has an active exclusion in SAM. This is a mandatory prohibition, not a discretionary factor.
Required offeror representation
Each offeror must represent that it does not export any sensitive technology to the Government of Iran or to entities or individuals owned or controlled by, or acting for or at the direction of, the Government of Iran. This representation is part of the offeror’s eligibility and compliance record.
Trade-agreements exception
If the acquisition is subject to trade agreements, the representation in paragraph (b) does not apply when the offeror certifies that all offered products are designated country end products or designated country construction material. In that situation, the solicitation/offer process does not require the sensitive-technology-to-Iran representation.
SAM exclusion status matters
The prohibition applies only when the person has an active exclusion in the System for Award Management. Contracting officers must therefore consider both the export activity and the current exclusion record before award or extension.
Responsibilities
Contracting Officer
Verify whether the prospective contractor is subject to an active exclusion in SAM and ensure the agency does not award or extend a contract to a prohibited person. Include the required representation in solicitations unless the trade-agreements exception applies, and document the basis for any exception used.
Offeror
Provide the required representation that it does not export sensitive technology to the Government of Iran or related Iranian entities or individuals, unless the acquisition falls under the trade-agreements exception and the offeror certifies that all offered products are designated country end products or designated country construction material.
Executive Agency
Comply with the statutory prohibition by not entering into or extending contracts with covered persons. Ensure acquisition personnel use the correct solicitation provisions and check exclusion information before award or extension.
President
Determine which technology is considered sensitive technology for purposes of this restriction, which defines the scope of the prohibition.
Practical Implications
This section can disqualify an otherwise competitive offeror if it has the prohibited export activity and an active SAM exclusion, so contractors should review their export history and exclusion status before bidding.
Contracting officers should not treat the representation as a formality; it is tied to award eligibility and should be checked consistently, especially when extending existing contracts.
The trade-agreements exception can remove the representation requirement, but only when the acquisition is actually subject to trade agreements and the offeror makes the required designated-country certification.
A common pitfall is assuming the rule applies only to direct exports to Iran; the text also covers exports to the Government of Iran and to entities or individuals owned, controlled by, or acting on behalf of or at the direction of that government.
Because the prohibition depends on both a presidential determination and an active SAM exclusion, users should confirm current status rather than relying on outdated records or assumptions.
Official Regulatory Text
(a) The head of an executive agency may not enter into or extend a contract for the procurement of goods or services with a person that exports certain sensitive technology to Iran, as determined by the President, and has an active exclusion in the System for Award Management at http://www.sam.gov ( 22 U.S.C. 8515 ). (b) Each offeror must represent that it does not export any sensitive technology to the government of Iran or any entities or individuals owned or controlled by, or acting on behalf or at the direction of, the government of Iran. (c) Exception for trade agreements . The representation requirement of paragraph (b) of this subsection does not apply if the acquisition is subject to trade agreements and the offeror certifies that all the offered products are designated country end products or designated country construction material (see subpart 25.4 ).