General
The Buy American statute requires most federal supply contracts to use U.S.-manufactured products with increasing domestic content thresholds, with strict rules for iron and steel items and limited exceptions.
Overview
FAR 25.101 outlines the general requirements of the Buy American statute for the acquisition of supplies by federal agencies. The regulation establishes a two-part test to determine whether a manufactured end product qualifies as a domestic end product: (1) it must be manufactured in the United States, and (2) it must meet specific domestic content thresholds. For most products, the cost of domestic components must exceed 60% (increasing to 65% for 2024-2028, and 75% from 2029 onward). For products made wholly or predominantly of iron or steel, foreign iron and steel must be less than 5% of total component costs. There are exceptions for Commercially Available Off-The-Shelf (COTS) items, but not for iron or steel products except for COTS fasteners. The statute applies to small business set-asides, but such products must still meet the domestic content test to be considered domestic. Exceptions to the Buy American requirements are detailed in FAR 25.103. Contracts spanning threshold increases must comply with the applicable threshold for each year unless an alternate test is approved by the senior procurement executive, who must consult with the Made in America Office before granting such exceptions.
Key Rules
- Domestic End Product Test
- Must be manufactured in the U.S. and meet domestic content thresholds (60%, 65%, or 75% depending on delivery year).
- Iron and Steel Products
- Foreign iron and steel must be less than 5% of total component cost; COTS waiver does not apply except for fasteners.
- Small Business Set-Asides
- Small business products must meet the domestic content test to qualify as domestic end products.
- Exceptions and Evaluation
- Exceptions are listed in FAR 25.103; evaluation factors apply to foreign offers.
- Threshold Increases and Alternate Tests
- Contracts spanning threshold increases must comply with each year’s threshold unless an alternate test is approved by the senior procurement executive.
Responsibilities
- Contracting Officers: Ensure compliance with domestic content thresholds, apply evaluation factors, and manage exceptions and alternate tests as required.
- Contractors: Certify and document compliance with manufacturing and content requirements, especially for iron/steel products and small business set-asides.
- Agencies: Oversee application of alternate domestic content tests and consult with the Made in America Office as needed.
Practical Implications
- This section ensures federal purchases prioritize U.S.-made products, supporting domestic manufacturing.
- Contractors must closely track component sourcing and content percentages, especially as thresholds increase.
- Failure to comply can result in disqualification or contract issues; understanding exceptions and alternate test procedures is critical.