FAR 25.703—Prohibition on contracting with entities that engage in certain activities or transactions relating to Iran.

Definitions.

FAR 25.703-1 provides the definitions that control how the Iran-related restrictions in this section are applied. It defines two key terms: "person" and "sensitive technology." The definition of "person" is broad and includes individuals, companies, partnerships, trusts, insurers, guarantors, other nongovernmental entities, and even governmental entities when they are acting as business enterprises, while excluding governments or governmental entities that are not operating as business enterprises. The definition of "sensitive technology" focuses on hardware, software, telecommunications equipment, and other technology intended to restrict the free flow of unbiased information in Iran or to disrupt, monitor, or otherwise restrict speech of the people of Iran, while excluding certain information or informational materials that the President cannot regulate under IEEPA section 203(b)(3). In practice, these definitions determine who can be covered by the rule and what kinds of goods or technology are implicated, which is critical for contractors, subcontractors, and contracting officers screening transactions for Iran-related compliance risk.

Iran Sanctions Act.

FAR 25.703-2 implements the Iran Sanctions Act certification requirement for federal procurements. It covers two separate certifications: one about whether the offeror or any person owned or controlled by the offeror engages in activities that may be sanctioned under section 5 of the Iran Sanctions Act, and another about whether the offeror or any person owned or controlled by the offeror knowingly engages in significant transactions with Iran’s Revolutionary Guard Corps or its officials, agents, or affiliates. The section also explains the consequences of a false certification, including termination, suspension, and debarment, and it provides an exception for acquisitions subject to trade agreements when the offeror certifies that all offered products or construction material are designated country end products or designated country construction material. In practice, this rule requires contractors to screen their corporate relationships and business activities for Iran-related sanctions risk before submitting an offer, and it requires contracting officials to treat a false certification as a serious compliance issue with potential contract and responsibility consequences. The section is designed to support U.S. sanctions policy by preventing federal contracting with entities that are engaged in prohibited Iran-related conduct or significant dealings with blocked Revolutionary Guard Corps entities.

Prohibition on contracting with entities that export sensitive technology to Iran.

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.

Waiver.

FAR 25.703-4 explains how to request a waiver from the Iran-related contracting prohibitions in FAR 25.703-2 and 25.703-3. It covers who may request a waiver, where the request must be sent, the need to allow enough time for review, and the fact that waivers may be granted on an individual or class basis but are not permanent and can be cancelled. The section also requires agency head review and clearance before submission of a waiver request. Most importantly, it lays out the information that should be included in the request, including agency and offeror contact details, a description of the product or service, contract value and duration, market research and justification, past performance and integrity information, and details about any relationship between the offeror and other firms tied to Iran-related prohibited conduct. In practice, this section is the roadmap for building a waiver package strong enough to support a national interest or national security determination under the Iran Sanctions Act and related authorities. For contractors, it signals that a waiver is possible but highly scrutinized; for agencies, it creates a formal process that requires documentation, senior-level review, and a clear showing that no other source is available and that the waiver is justified.