When Buy American does not apply to supplies

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1. Five exceptions to the supply rule

The Federal Acquisition Regulation (FAR) applies the Buy American statute to supplies through subpart 25.1. Its basic policy is to acquire only domestic end products for public use inside the United States (FAR 25.102). That policy carries an exception clause: it applies except as provided in FAR 25.103. When one of the listed exceptions applies, the contracting officer may acquire a foreign end product without regard to the statute’s restrictions (FAR 25.103). The exceptions are public interest, nonavailability, unreasonable cost, resale, and information technology that is a commercial product.

The FAR points to those exceptions from its general section too. Exceptions that allow the purchase of a foreign end product are listed at FAR 25.103 (FAR 25.101(c)). The unreasonable cost exception works through an evaluation factor applied to low foreign offers that are not eligible offers. The evaluation factor is not used to prefer one foreign offer over another, and evaluation procedures and examples are in FAR subpart 25.5.

2. Public interest

The head of the agency may determine that domestic preference would be inconsistent with the public interest (FAR 25.103(a)). This exception applies when an agency has an agreement with a foreign government that provides a blanket exception to the Buy American statute.

3. Nonavailability

The statute does not apply to a class or kind of item that is not mined, produced or manufactured in the United States in sufficient and reasonably available commercial quantities of satisfactory quality (FAR 25.103(b)). The test applies whether the items are acquired as end items or as components. The FAR implements it through class determinations, individual determinations, and a case where no written determination is needed.

A class nonavailability determination has been made for the articles listed in FAR 25.104 (FAR 25.103(b)(1)(i)). The FAR explains what that determination means. It does not necessarily mean there is no domestic source for the listed items, but that domestic sources can meet only 50 percent or less of total government and nongovernment demand. Before acquiring an article on the list, the procuring agency must conduct market research suited to the circumstances, including seeking domestic sources (FAR 25.103(b)(1)(ii)). That duty applies whether the article is an end product or a significant component, meaning one valued at more than 50 percent of the value of all the components.

The class determination stops applying if the contracting officer learns before the deadline for bids or final offers that a listed article is available domestically in sufficient quantity and quality to meet the solicitation (FAR 25.103(b)(1)(iii)). The contracting officer must then include the appropriate Buy American provision and clause in the solicitation. The solicitation must state that the article is available domestically and that foreign components of the same class or kind may not be treated as domestic. The contracting officer must also send supporting documentation to the appropriate council for possible removal of the article from the list.

4. Individual determinations

The head of the contracting activity may determine that a particular article, material or supply is not mined, produced or manufactured domestically in sufficient and reasonably available commercial quantities of satisfactory quality (FAR 25.103(b)(2)(i)). A determination is not required before 1 January 2030 if there is an offer for a foreign end product that exceeds 55 percent domestic content. If the contracting officer considers that an article’s nonavailability is likely to affect future acquisitions, the determination and supporting documents may go to the appropriate council for possible addition to the FAR 25.104 list (FAR 25.103(b)(2)(ii)).

A written determination is not required at all if three conditions are all present (FAR 25.103(b)(3)). The acquisition was conducted through full and open competition, it was synopsized under FAR 5.201, and no offer for a domestic end product was received.

5. Unreasonable cost, resale and commercial IT

The contracting officer may determine that the cost of a domestic end product would be unreasonable, under FAR 25.106 and subpart 25.5 (FAR 25.103(c)). The arithmetic behind that determination is covered in pricing a domestic offer against a foreign one. The contracting officer may also purchase foreign end products specifically for commissary resale (FAR 25.103(d)).

The restriction on purchasing foreign end products does not apply to information technology that is a commercial product, when fiscal year 2004 or later funds are used (FAR 25.103(e)). The FAR traces this exception to section 535(a) of Division F, Title V, of the Consolidated Appropriations Act, 2004, and similar sections in later appropriations acts.

6. The list of nonavailable articles

FAR 25.104 lists 39 articles determined to be nonavailable under the class determination (FAR 25.104(a)). Many are agricultural or food products, such as bananas, cocoa beans, raw coffee, tea in bulk, spices and herbs in bulk, and vanilla beans. Others are minerals and metals, including antimony, bismuth, chrome ore or chromite, rutile, quartz crystals, and tin in bars, blocks and pigs. Natural fibers and materials appear too, such as abaca, coir, flax, jute, sisal, raw silk, hemp yarn, cork and crude natural rubber.

A few entries are manufactured items (FAR 25.104(a)). They include books and periodicals not printed in the United States where domestic editions are not available, microscope slide cover glass, modacrylic fiber, and nitroguanidine, also known as picrite. One entry covers spare and replacement parts for equipment of foreign manufacture where domestic parts are not available. The list also includes swords and scabbards, and cobra venom.

The list will be published in the Federal Register for public comment at least once every five years (FAR 25.104(b)). Unsolicited recommendations to delete items may be submitted at any time, and should provide enough data and rationale to permit evaluation. The domestic content test that the exceptions displace is covered in what makes an end product domestic.

Key terms

Public interest exception	An agency head determination, used where a foreign government agreement gives a blanket exception.
Class nonavailability	The determination behind the FAR 25.104 list: domestic sources meet half of demand or less.
Individual nonavailability	A determination by the head of the contracting activity for a particular article.
Significant component	A component valued at more than 50 percent of all components.
Commissary resale	Purchases of foreign end products specifically for resale in commissaries.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

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