25.001 General
Source: FAR 25.001 on acquisition.gov
FAR 25.001 establishes when Buy American restrictions apply, how exceptions work, and the tests for determining country of origin in federal acquisitions.
Overview
FAR 25.001 provides the foundational rules for the Buy American statute and its relationship to trade agreements in federal acquisitions. It outlines restrictions on purchasing foreign supplies and construction materials for use within the United States, details exceptions, and explains how country of origin is determined under various statutes and agreements. The section also clarifies when trade agreements override Buy American restrictions and highlights special rules for acquisitions using American Recovery and Reinvestment Act (ARRA) funds.
Key Rules
- Buy American Restrictions
- Purchases for use in the U.S. must favor domestic end products and construction materials, with exceptions for unreasonable cost or other specific circumstances.
- Trade Agreement Exceptions
- Certain acquisitions, based on dollar thresholds and country of origin, are exempt from Buy American restrictions and must treat eligible foreign products equally.
- Country of Origin Tests
- The Buy American statute uses a two-part test (manufacture in the U.S. and domestic content), while trade agreements use the “substantial transformation” test. COTS items have special rules.
- ARRA Funded Projects
- For ARRA-funded construction, materials must be manufactured in the U.S., and iron or steel must be produced domestically.
Responsibilities
- Contracting Officers: Must determine applicability of Buy American or trade agreements, apply correct country of origin tests, and ensure compliance with exceptions and special funding rules.
- Contractors: Must certify and supply compliant products/materials, understand origin requirements, and provide accurate representations.
- Agencies: Oversee compliance, ensure proper application of exceptions, and monitor adherence to funding-specific rules.
Practical Implications
- This section ensures federal spending supports domestic industries unless trade agreements or exceptions apply. Contractors must be vigilant about origin requirements, especially for construction and supply contracts, and stay updated on thresholds and exceptions to avoid compliance issues.
(1) Restricts the purchase of supplies, that are not domestic end products, for use within the United States. A foreign end product may be purchased if the contracting officer determines that the price of the lowest domestic offer is unreasonable or if another exception applies (see subpart 25.1); and
(2) Requires, with some exceptions, the use of only domestic construction materials in contracts for construction in the United States (see subpart 25.2).
(b) The restrictions in the Buy American statute are not applicable in acquisitions subject to certain trade agreements (see subpart 25.4). In these acquisitions, end products and construction materials from certain countries receive nondiscriminatory treatment in evaluation with domestic offers. Generally, the dollar value of the acquisition determines which of the trade agreements applies. Exceptions to the applicability of the trade agreements are described in subpart 25.4.
(c) The test to determine the country of origin for an end product under the Buy American statute (see the various country "end product" definitions in 25.003) is different from the test to determine the country of origin for an end product under the trade agreements, or the criteria for the representation on end products manufactured outside the United States (see 52.225-18).
(1) The Buy American statute uses a two-part test to define a "domestic end product" or "domestic construction material" (manufactured in the United States and a domestic content test). The domestic content test has been waived for acquisition of commercially available off-the-shelf (COTS) items, except a product that consists wholly or predominantly of iron or steel or a combination of both (excluding COTS fasteners) (see 25.101(a) and 25.201(b)).
(2) Under the trade agreements, the test to determine country of origin is "substantial transformation" (i.e., transforming an article into a new and different article of commerce, with a name, character, or use distinct from the original article).
(3) For the representation at 52.225-18, the only criterion is whether the place of manufacture of an end product is in the United States or outside the United States, without regard to the origin of the components.
(4) When using funds appropriated under the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5), the definition of "domestic manufactured construction material" requires manufacture in the United States but does not include a requirement with regard to the origin of the components. If the construction material consists wholly or predominantly of iron or steel, the iron or steel must be produced in the United States.