52.225-23
Required Use of American Iron, Steel, and Manufactured Goods-Buy American Statute-Construction Materials under Trade Agreements
On covered construction contracts, use only domestic materials or specifically permitted designated-country materials unless the Contracting Officer approves a documented exception—especially for iron and steel, where U.S. production rules are strict.
Overview
- FAR 52.225-23 governs what construction materials may be used on covered construction contracts when the Buy American statute, trade agreements, and section 1605 of the American Recovery and Reinvestment Act (Recovery Act) intersect.
- Its core purpose is to require use of domestic construction material unless an allowed exception applies, while also recognizing certain designated country materials as acceptable under U.S. trade obligations.
Key Rules
- Definitions and material categories
- The clause distinguishes between domestic, foreign, designated country, Recovery Act designated country, manufactured, and unmanufactured construction materials. For iron or steel construction materials, domestic status requires U.S. manufacture and U.S. production of the iron or steel, with only limited metallurgical refinement excluded.
- Required material sources
- Contractors must use only domestic construction material, Recovery Act designated country manufactured construction material, or designated country unmanufactured construction material, unless the contract lists an exception or the Contracting Officer approves one.
- Exceptions and waiver standards
- Exceptions may be allowed when domestic material is unavailable, inconsistent with the public interest, impracticable, or unreasonably costly. Unreasonable cost is measured by thresholds: more than 25% increase for domestic manufactured material and more than 20% for domestic unmanufactured material.
- Requests to use foreign material
- A contractor seeking an exception must provide detailed supporting data, including descriptions, quantities, costs, delivery timing, supplier information, project location, and justification. Cost-based requests also require a market survey and the clause’s cost comparison table.
Responsibilities
- Contracting Officers: list any excepted materials in the clause, evaluate exception requests, determine whether statutory exceptions apply, and modify the contract only after negotiating adequate consideration when appropriate.
- Contractors: source compliant materials, identify whether materials are domestic or from qualifying designated countries, and submit complete, timely exception requests with supporting documentation.
- Agencies: ensure implementation of trade agreement obligations and Recovery Act/Buy American restrictions in covered construction acquisitions.
Practical Implications
- This clause directly affects material sourcing, supplier selection, pricing, and schedule planning on federal construction projects.
- Contractors should verify country of origin and manufacturing status early, especially for items consisting wholly or predominantly of iron or steel.
- A common pitfall is assuming foreign material can be used based on availability or price without first obtaining a formal determination. Post-award requests face added scrutiny and must explain why the issue was not foreseeable before award.
- Alternate I further excludes Bahraini, Mexican, or Omani construction material from the otherwise permitted designated-country treatment when that alternate is included.