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FAR and DFARS › FAR Part 25: Foreign Acquisition › Subpart 25.5

FAR 25.504-1 Buy American statute.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section gives worked examples of how the Buy American statute is applied to small-business set-aside acquisitions of end products for use in the United States. It shows how offers are evaluated as domestic or foreign, how a 30 percent factor can be applied to a foreign offer, and when an otherwise higher domestic offer may be found reasonable. It matters because it illustrates the price-evaluation mechanics that can decide which offer wins.

Applies to: Small-business set-aside acquisitions of end products for use in the United States

Key terms: Buy American statute · domestic end product · foreign end product · 30 percent factor · evaluated price

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a)(1) Example 1.

(2) Analysis. This acquisition is for end products for use in the United States and is set aside for small business concerns. The Buy American statute applies. Since the acquisition value is less than $50,000 and the acquisition is set aside, none of the trade agreements apply. Perform the steps in 25.502(a). Offer C is of 50 percent domestic content, therefore Offer C is evaluated as a foreign end product, because it is the product of a small business but is not a domestic end product (see 25.502(c)(4)). Since Offer B is a domestic offer, apply the 30 percent factor to Offer C (see 25.106(b)(2)). The resulting evaluated price of $13,130 remains lower than Offer B. The cost of Offer B is therefore unreasonable (see 25.106(b)(1)(ii)). The 25.106(b)(2) procedures do not apply. Award on Offer C at $10,100 (see 25.502(c)(4)(i)).

(b)(1) Example 2.

(2) Analysis: This acquisition is for end products for use in the United States and is set aside for small business concerns. The Buy American statute applies. Perform the steps in 25.502(a). Offer C is evaluated as a foreign end product because it is the product of a small business but is not a domestic end product (see 25.502(c)(4)). After applying the 30 percent factor, the evaluated price of Offer C is $13,260. Award on Offer B at $10,700 (see 25.502(c)(4)(ii)).

(c)(1) Example 3.

(2) Analysis. This acquisition is for end products for use in the United States and is set aside for small business concerns. The Buy American statute applies. Since the acquisition value is less than $50,000 and the acquisition is set aside, none of the trade agreements apply. Perform the steps in 25.502(a). Offers B and C are initially evaluated as foreign end products, because they are the products of small businesses but are not domestic end products (see 25.502(c)(4)). Offer C is the low offer. After applying the 30 percent factor, the evaluated price of Offer C is $13,130. The resulting evaluated price of $13,130 remains lower than Offer A. The cost of Offer A is therefore unreasonable. Offer B is then treated as a domestic offer, because it is for a U.S.-made end product that exceeds 55 percent domestic content (see 25.106(b)(2)). Offer B is determined reasonable because it is lower than the $13,130 evaluated price of Offer C. Award on Offer B at $12,500.

Sections it refers to

  • 25.502 Application.
  • 25.106 Determining reasonableness of cost.

← 25.504 Evaluation Examples. · 25.504-2 WTO GPA/Caribbean Basin Trade Initiative/FTAs. →

Rule changes for FAR Part 25

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 25.504-1 Buy American statute · SpendQuery