Overview
FAR Subpart 25.11 provides the specific instructions and "prescriptions" for Contracting Officers regarding which provisions and clauses must be included in solicitations and contracts related to foreign acquisition. It serves as the implementation guide for the Buy American statute, Trade Agreements Act, and various other international trade restrictions, categorized by the type of procurement (supplies vs. construction) and total contract value.
Key Rules
- Threshold-Based Clause Selection (Supplies):
- Below $50,000: Generally uses 52.225-1 (Buy American-Supplies).
- $50,000 to $174,000: Uses 52.225-3 (Buy American-Free Trade Agreements-Israeli Trade Act) with various Alternates depending on the specific dollar range.
- $174,000 or more: Uses 52.225-5 (Trade Agreements) if the WTO GPA applies.
- Threshold-Based Clause Selection (Construction):
- Below $6,708,000: Uses 52.225-9 (Buy American-Construction Materials).
- $6,708,000 or more: Uses 52.225-11 (Buy American-Construction Materials under Trade Agreements).
- Domestic Content Escalation: For both supplies and construction, the "domestic content" requirement for end products is scheduled to increase over time:
- 2022-2023: 60%
- 2024-2028: 65%
- Post-2028: 75%
- Mandatory Prohibitions: All solicitations must include 52.225-25 (Prohibition on Contracting with Entities Engaging in Certain Activities Relating to Iran). Solicitations for non-commercial items must include 52.225-20 (Sudan Certification).
- Duty-Free Entry: The clause 52.225-8 is required for supplies imported into the U.S. if the value exceeds the Simplified Acquisition Threshold (SAT).
Responsibilities
- Contracting Officers (COs):
- Must calculate the estimated contract value to determine which trade clause and alternate version to insert.
- Must insert the correct domestic content percentage (65% or 75%) into clauses based on the estimated award year.
- Identify specific foreign construction materials excepted from Buy American requirements in the contract schedule.
- Specify the source for exchange rates when foreign currency offers are permitted.
- Senior Procurement Executives (SPEs):
- Responsible for allowing the use of an "alternate domestic content test" in specific scenarios.
- Agency Heads:
- Authorized to determine if higher evaluation percentages (penalties for foreign offers) are appropriate for construction materials.
- Offerors/Contractors:
- Must provide certifications (Buy American Certificate, Trade Agreements Certificate) indicating the origin of their products.
- Must monitor their supply chains to meet the increasing domestic content thresholds.
Practical Implications
- "Staircase" Compliance: Contractors must be aware that a multi-year contract awarded in 2024 requires 65% domestic content, but the FAR allows the CO to use Alternates to ensure the threshold remains consistent or shifts according to the specific year of performance.
- Administrative Precision: Selecting the wrong Alternate (e.g., using Alternate II instead of Alternate III for an acquisition valued at $101,000) can lead to protests or compliance violations, as these alternates specifically account for different Free Trade Agreements (like the Israeli Trade Act).
- IT Exception: Commercial Information Technology (IT) is a major exception to the Buy American statute for supply contracts, significantly simplifying the procurement of hardware and software from foreign sources.
- Construction Complexity: Construction projects near the $6.7M or $13.2M thresholds require rigorous analysis of the origin of every material (unmanufactured vs. manufactured) and the specific country of origin (e.g., Bahrain, Mexico, and Oman have different treatment under certain alternates).