25.602-1 Section 1605 of the Recovery Act
Source: FAR 25.602-1 on acquisition.gov
Recovery Act-funded construction projects must use iron, steel, and manufactured goods produced in the U.S., with limited exceptions for trade agreements and specific components.
Overview
FAR 25.602-1 implements Section 1605 of the American Recovery and Reinvestment Act (Recovery Act), establishing strict domestic sourcing requirements for iron, steel, and manufactured goods used in projects funded by the Act. It mandates that, unless an exception applies, no Recovery Act funds may be used for construction, alteration, maintenance, or repair of public buildings or public works unless all iron, steel, and manufactured goods are produced or manufactured in the United States. The regulation details specific requirements for iron and steel components, manufactured materials, and provides examples to clarify compliance. It also addresses the impact of trade agreements and clarifies that these requirements apply to all relevant contracts or line items within a project.
Key Rules
- Domestic Production Requirement
- All iron, steel, and manufactured goods used as construction material must be produced or manufactured in the United States, with specific rules for iron and steel components.
- Iron and Steel Components
- For materials consisting wholly or predominantly of iron or steel, all manufacturing processes (except certain metallurgical refinements) must occur in the U.S.
- Manufactured Materials Purchased by the Government
- These must meet the same domestic source requirements as other construction materials.
- Trade Agreement Exception
- If trade agreements apply, materials may be sourced from designated countries if substantially transformed there.
- Project Scope
- Requirements apply regardless of whether the project is covered by one or multiple contracts or line items.
Responsibilities
- Contracting Officers: Ensure all applicable contracts comply with domestic sourcing requirements and verify exceptions or trade agreement applicability.
- Contractors: Source and document all iron, steel, and manufactured goods in compliance with U.S. production requirements or applicable trade agreements.
- Agencies: Oversee compliance and ensure Recovery Act funds are not used in violation of these sourcing rules.
Practical Implications
- This section ensures Recovery Act funds support U.S. manufacturing and labor.
- Contractors must carefully track the origin and manufacturing process of all relevant materials, especially iron and steel.
- Non-compliance can result in disallowance of costs or contract termination. Common pitfalls include misunderstanding the definition of "manufactured in the United States" and failing to account for all components in complex assemblies.
Except as provided in 25.603-
(a) None of the funds appropriated or otherwise made available by the Recovery Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless the public building or public work is located in the United States and-
(1) All of the iron, steel, and manufactured goods used as construction material in the project are produced or manufactured in the United States.
(i) All manufactured construction material must be manufactured in the United States.
(ii) Iron or steel components.
(A) Iron or steel components of construction material consisting wholly or predominantly of iron or steel must be produced in the United States. This does not restrict the origin of the elements of the iron or steel, but requires that all manufacturing processes of the iron or steel must take place in the United States, except metallurgical processes involving refinement of steel additives.
(B) The requirement in paragraph (a)(1)(ii)(A) of this section does not apply to iron or steel components or subcomponents in construction material that does not consist wholly or predominantly of iron or steel.
(iii) All other components. There is no restriction on the origin or place of production or manufacture of components or subcomponents that do not consist of iron or steel.
(iv) Examples.
(A) If a steel guardrail consists predominantly of steel, even though coated with aluminum, then the steel would be subject to the section 1605 restriction requiring that all stages of production of the steel occur in the United States, in addition to the requirement to manufacture the guardrail in the United States. There would be no restrictions on the other components of the guardrail.
(B) If a wooden window frame is delivered to the site as a single construction material, there is no restriction on any of the components, including the steel lock on the window frame; or
(2) If trade agreements apply, the manufactured construction material shall either comply with the requirements of paragraph (a)(1) of this subsection, or be wholly the product of or be substantially transformed in a Recovery Act designated country;
(b) Manufactured materials purchased directly by the Government and delivered to the site for incorporation into the project shall meet the same domestic source requirements as specified for manufactured construction material in paragraphs (a)(1) and (a)(2) of this section; and
(c) A project may include several contracts, a single contract, or one or more line items on a contract.