FAR Part 25 - Foreign Acquisition (Buy American Act at 41 USC chapter 83, Trade Agreements Act at 19 USC 2511-2518, Domestic Content Thresholds, FTA Partner Treatment, Iran and Sudan Sanctioned Sources)

What FAR Part 25 - Foreign Acquisition (Buy American Act at 41 USC chapter 83, Trade Agreements Act at 19 USC 2511-2518, Domestic Content Thresholds, FTA Partner Treatment, Iran and Sudan Sanctioned Sources) requires

Federal Acquisition Regulation (FAR) Part 25 implements the Buy American Act at 41 USC chapter 83, the Trade Agreements Act at 19 USC sections 2511-2518, and related foreign-source restrictions. Subpart 25.1 requires agencies to acquire only domestic end products for supply contracts above the micro-purchase threshold for use within the US, applying a two-part test: (i) article manufactured in the United States and (ii) component cost threshold of 65% domestic content during 2024-2028 increasing to 75% from 2029, with COTS items waived from the domestic content test under 41 USC 1907 except for iron and steel products. Unreasonable cost exceptions under FAR 25.106 apply price preference factors when the low offer is foreign: add 20% to the foreign offer when comparing against a large business domestic offer and 30% when comparing against a small business domestic offer. Subpart 25.2 applies the same regime to construction materials with the iron and steel rule that foreign iron and steel must constitute less than 5% of component costs; the trade agreements construction threshold is USD 6,683,000. Subpart 25.4 implements trade agreements (WTO GPA, USMCA, Australia, Chile, Korea, Colombia, Peru, Bahrain, CAFTA-DR, Israeli Trade Act, Caribbean Basin Initiative) - designated country end products receive non-discriminatory treatment when the acquisition exceeds the applicable threshold; small business set-asides, arms and ammunition, resale acquisitions, and Federal Prison Industries and AbilityOne contracts (subparts 8.6 and 8.7) are excluded from trade agreements coverage under 25.401. Subpart 25.3 covers contracts performed outside the US, including 25.302 application of 32 CFR Part 159 to contractor private security functions in areas of combat operations. Subpart 25.7 implements Treasury-administered prohibited sources: 25.701 OFAC list compliance; 25.702 Sudan business operations prohibition with contractor certification; 25.703 Iran Sanctions Act and Iran Divestment List under clauses 52.225-20 and 52.225-21; agency head waiver authority for national security or national defense purposes. Subpart 25.6 implements American Recovery and Reinvestment Act (Pub. L. 111-5) domestic construction material requirements with the iron-and-steel-must-be-US-produced rule when the construction material is wholly or predominantly iron or steel. Subpart 25.11 prescribes the clause matrix: 52.225-1 (Buy American Supplies), 52.225-3 (Buy American Free Trade Agreements), 52.225-5 (Trade Agreements), 52.225-9 / 52.225-10 / 52.225-11 / 52.225-12 (Buy American Construction Materials variants), 52.225-19 (Contractor Personnel in Designated Operational Areas), 52.225-26 (Private Security Functions Outside US), 52.225-20 and 52.225-21 (Iran sanctions representations).

Pillar: Public Sector & Government Procurement · Authority: Federal Acquisition Regulatory Council (DOD, GSA, NASA) issuing the Federal Acquisition Regulation under 41 USC 1303 and 48 CFR Chapter 1; Office of Management and Budget Made in America Office under EO 14005 administering domestic content waivers; United States Trade Representative (USTR) administering trade agreement designations and thresholds under 19 USC; Office of Foreign Assets Control (OFAC) at the US Department of the Treasury administering sanctions; Department of State Iran Divestment List under the Comprehensive Iran Sanctions, Accountability, and Divestment Act Pub. L. 111-195 · Version: 1.0.0 · Last updated: 2026-06-02

Primary source: https://www.acquisition.gov/far/part-25

SHA-256 integrity: 42b9cc8cc3fc4c5e83eeed42fec578b9de3e5b9f8db7fb2b60ae1d9bc3f7be67

Primary Citations — 7 traced to source

• FAR Part 25 Section 25.101(a) (Buy American policy): 'The Buy American statute restricts the purchase of supplies, that are not domestic end products, for use within the United States. A foreign end product may be purchased if the contracting officer determines that the price of the lowest domestic offer is unreasonable or if another exception applies (see 25.103).' The two-part test requires the article to be manufactured in the United States and the component cost threshold to be met (60% through 2023; 65% during 2024-2028; 75% from 2029) except commercial-off-the-shelf items waived under 41 USC 1907 (other than iron and steel products).
• FAR Part 25 Section 25.106 (Evaluating offers of foreign end products): When the low offer is a foreign offer that is not subject to a trade agreement and the agency intends to acquire a foreign end product, the contracting officer evaluates the offers by adding a factor to the foreign offer price. The factor is 20 percent if the lowest domestic offer is from a large business or 30 percent if the lowest domestic offer is from a small business; for critical items, additional preference factors may apply under 25.105; if the foreign offer remains low after applying the factor, the acquisition may proceed as a foreign acquisition under the unreasonable cost exception.

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