25.504-1
Buy American statute
For small business set-asides under $50,000, the Buy American statute requires careful evaluation of domestic content and application of a 30% price factor to non-domestic offers, directly impacting award decisions.
Overview
FAR 25.504-1 provides detailed evaluation examples for applying the Buy American statute to acquisitions set aside for small business concerns, specifically for end products used in the United States with a value below $50,000. The section illustrates how to evaluate offers from small businesses that provide domestic end products versus U.S.-made but non-domestic end products, emphasizing the application of price evaluation factors and the determination of reasonableness in award decisions.
Key Rules
- Application of the Buy American Statute
- For small business set-asides under $50,000, the Buy American statute applies, but trade agreements do not.
- Evaluation of Offers
- Offers for domestic end products are evaluated at face value, while U.S.-made but non-domestic end products are treated as foreign and subject to a 30% price evaluation factor.
- Determining Reasonableness
- If the lowest evaluated price (after applying the factor) is still below the domestic offer, the domestic offer may be deemed unreasonable, and award may go to the non-domestic offer.
- Domestic Content Thresholds
- Offers exceeding 55% domestic content may be treated as domestic for evaluation purposes.
Responsibilities
- Contracting Officers: Must correctly apply the Buy American statute, evaluate offers using the prescribed factors, and determine reasonableness per FAR 25.502 and 25.106.
- Contractors: Must accurately represent the domestic content of their products and understand how their offers will be evaluated.
- Agencies: Ensure compliance with evaluation procedures and document award decisions.
Practical Implications
- This section clarifies how to apply price evaluation factors and domestic content thresholds in small business set-asides, helping avoid misapplication of the Buy American statute.
- Contractors should be aware that even if their product is U.S.-made, it may be evaluated as foreign if it does not meet domestic content requirements, impacting competitiveness.
- Common pitfalls include misclassifying end products or failing to apply the correct evaluation factors, which can lead to improper award decisions.