25.101 General
Source: FAR 25.101 on acquisition.gov
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.
(a) The Buy American statute restricts the purchase of supplies that are not domestic end products. For manufactured
end products, the Buy American statute, https://www.federalregister.gov/executive-order/13881" target="_blank">E.O. 13881, and https://www.federalregister.gov/executive-order/14005" target="_blank">E.O. 14005 use a two-part test to define a domestic end product.
(1) The article must be manufactured in the United States; and
(2)
(i) Except for an end product that consists wholly or predominantly of iron or steel or a combination of both, the cost of domestic components shall exceed 60 percent of the cost of all the components, except that the percentage will be 65 percent for items delivered in calendar years 2024 through 2028 and 75 percent for items delivered starting in calendar year 2029. But see paragraph (d) of this section. In accordance with http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section1907&num=0&edition=prelim" target="_blank">41 U.S.C. 1907, this domestic content test of the Buy American statute has been waived for acquisitions of COTS items (see 12.505(a)) (but see paragraph (a)(2)(ii) of this section).
(ii) For an end product that consists wholly or predominantly of iron or steel or a combination of both, the cost of foreign iron and steel must constitute less than 5 percent of the cost of all the components used in the end product (see the definition of "foreign iron and steel" at 25.003). The cost of foreign iron and steel includes but is not limited to the cost of foreign iron or steel mill products (such as bar, billet, slab, wire, plate, or sheet), castings, or forgings utilized in the manufacture of the end product and a good faith estimate of the cost of all foreign iron or steel components excluding COTS fasteners. This domestic content test of the Buy American statute has not been waived for acquisitions of COTS items in this category, except for COTS fasteners.
(b) The Buy American statute applies to small business set-asides. A manufactured product of a small business concern is a U.S.-made end product, but is not a domestic end product unless it meets the domestic content test in paragraph (a)(2) of this section.
(c) Exceptions that allow the purchase of a foreign end product are listed at 25.103. The unreasonable cost exception is implemented through the use of an evaluation factor applied to low foreign offers that are not eligible offers. The evaluation factor is not used to provide a preference for one foreign offer over another. Evaluation procedures and examples are provided in subpart 25.5 .
(d)
(1) A contract with a period of performance that spans the schedule of domestic content threshold increases specified in paragraph (a)(2)(i) of this section shall be required to comply with each increased threshold for the items in the year of delivery, unless the senior procurement executive of the contracting agency allows for application of an alternate domestic content test for that contract under which the domestic content threshold in effect at time of contract award will apply to the entire period of performance for the contract. This authority is not delegable. The senior procurement executive shall consult the Office of Management and Budget's Made in America Office before allowing the use of the alternate domestic content test.
(2)When a senior procurement executive allows for application of an alternate domestic content test for a contract—
(i)See 25.1101(a)(1)(ii) or 25.1101(b)(1)(v) for use of the appropriate Alternate clause to reflect the domestic content threshold that will apply to the entire period of performance for that contract; and
(ii)Use the fill-in at 52.213-4(b)(1)(xviii)(B) instead of including 52.225-1 Alternate I when using 52.213-4, Terms and Conditions—Simplified Acquisitions (Other Than Commercial Products and Commercial Services).