52.225-1 Buy American-Supplies
Source: FAR 52.225-1 on acquisition.gov
Contractors must deliver domestic end products that meet increasing U.S. content thresholds, with specific rules for COTS and iron/steel items, unless otherwise specified in the contract.
Overview
FAR 52.225-1, Buy American-Supplies, establishes requirements for contractors to provide domestic end products when supplying goods to the U.S. Government. The clause defines key terms such as domestic end product, component, and COTS (commercially available off-the-shelf) items, and sets out the criteria for determining whether a product qualifies as domestic under the Buy American statute. The regulation includes specific thresholds for domestic content, which increase over time, and provides exceptions for certain COTS items and iron/steel products. Contractors must deliver only domestic end products unless otherwise specified, and may consult with the Contracting Officer regarding exceptions or lists of foreign articles treated as domestic.
Key Rules
- Domestic Content Requirements
- End products must meet specific domestic content thresholds (currently 60%, increasing to 65% in 2024-2028, and 75% from 2029) to qualify as domestic, with special rules for iron and steel products.
- COTS Item Exception
- COTS items are generally exempt from the domestic content test, except for iron and steel products, where only the iron and steel content is tested.
- Offeror and Contractor Obligations
- Contractors must deliver only domestic end products unless foreign end products are specified in the Buy American Certificate.
- Definitions and Calculations
- The clause provides detailed definitions for key terms and outlines how to calculate the cost of components and determine product origin.
Responsibilities
- Contracting Officers: Must provide lists of foreign articles treated as domestic and insert appropriate domestic content percentages when using Alternate I.
- Contractors: Must ensure delivered products meet domestic content requirements, maintain documentation, and specify any foreign end products in their offer.
- Agencies: Oversee compliance and manage exceptions or waivers as applicable.
Practical Implications
- This clause ensures federal procurement supports U.S. manufacturing and supply chains.
- Contractors must carefully track and document the origin and cost of components to ensure compliance.
- Failure to comply can result in contract penalties or disqualification. Common pitfalls include misclassifying COTS items or miscalculating domestic content percentages.
As prescribed in 25.1101(a)(1), insert the following clause:
Buy American-Supplies (Oct 2022)
(a) Definitions. As used in this clause—
Commercially available off-the-shelf (COTS) item—
(1) Means any item of supply (including construction material) that is–
(i) A commercial product (as defined in paragraph (1) of the definition of “commercial product” at Federal Acquisition Regulation (FAR) 2.101);
(ii) Sold in substantial quantities in the commercial marketplace; and
(iii) Offered to the Government, under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace; and
(2) Does not include bulk cargo, as defined in http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section40102(4)&num=0&edition=prelim" target="_blank">46 U.S.C. 40102(4), such as agricultural products and petroleum products.
Component means an article, material, or supply incorporated directly into an end product.
Cost of components means—
(1) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or
(2) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product.
Critical component means a component that is mined, produced, or manufactured in the United States and deemed critical to the U.S. supply chain. The list of critical components is at FAR 25.105 .
Domestic end product means—
(1) For an end product that does not consist wholly or predominantly of iron or steel or a combination of both-
(i) An unmanufactured end product mined or produced in the United States;
(ii) An end product manufactured in the United States, if-
(A) The cost of its components mined, produced, or manufactured in the United States exceeds 60 percent of the cost of all its 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. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Components of unknown origin are treated as foreign. Scrap generated, collected, and prepared for processing in the United States is considered domestic; or
(B) The end product is a COTS item; or
(2) For an end product that consists wholly or predominantly of iron or steel or a combination of both, an end product manufactured in the United States, if the cost of foreign iron and steel constitutes less than 5 percent of the cost of all the components used in the end product. 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. Iron or steel components of unknown origin are treated as foreign. If the end product contains multiple components, the cost of all the materials used in such end product is calculated in accordance with the definition of "cost of components".
End product means those articles, materials, and supplies to be acquired under the contract for public use.
Fastener means a hardware device that mechanically joins or affixes two or more objects together. Examples of fasteners are nuts, bolts, pins, rivets, nails, clips, and screws.
Foreign end product means an end product other than a domestic end product.
Foreign iron and steel means iron or steel products not produced in the United States. Produced in the United States means that all manufacturing processes of the iron or steel must take place in the United States, from the initial melting stage through the application of coatings, except metallurgical processes involving refinement of steel additives. The origin of the elements of the iron or steel is not relevant to the determination of whether it is domestic or foreign.
Predominantly of iron or steel or a combination of both means that the cost of the iron and steel content exceeds 50 percent of the total cost of all its components. The cost of iron and steel is the cost of the iron or steel mill products (such as bar, billet, slab, wire, plate, or sheet), castings, or forgings utilized in the manufacture of the product and a good faith estimate of the cost of iron or steel components excluding COTS fasteners.
Steel means an alloy that includes at least 50 percent iron, between 0.02 and 2 percent carbon, and may include other elements.
United States means the 50 States, the District of Columbia, and outlying areas.
(b) http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter83&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 83, Buy American, provides a preference for domestic end products for supplies acquired for use in the United States. 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, the domestic content test of the Buy American statute is waived for an end product that is a COTS item (see 12.505(a)(1)), except that for an end product that consists wholly or predominantly of iron or steel or a combination of both, the domestic content test is applied only to the iron and steel content of the end product, excluding COTS fasteners.
(c) Offerors may obtain from the Contracting Officer a list of foreign articles that the Contracting Officer will treat as domestic for this contract.
(d) The Contractor shall deliver only domestic end products except to the extent that it specified delivery of foreign end products in the provision of the solicitation entitled "Buy American Certificate."
(End of clause)
Alternate I (Oct 2022). As prescribed in 25.1101 (a)(1)(ii) substitute the following sentence for the first sentence of paragraph (1)(ii)(A) of the definition of “domestic end product” in paragraph (a):
(A) The cost of its components mined, produced, or manufactured in the United States exceeds __ percent of the cost of all its components. [ Contracting officer to insert the percentage. ]