U.S. flag
          An official website of the United States Government  Main navigation
  

        

              Data Initiatives
                              Regulations
                                                                        Row 1
                                              FAR FAR
                              Smart Matrix Smart Matrix
                              Chapter 99 (CAS) Chapter 99 (CAS)
                              Row 2
                                              DFARS DFARS
                              DFARSPGI DFARSPGI
                              AFARS AFARS
                              DAFFARS DAFFARS
                              DAFFARS MP DAFFARS MP
                              DARS DARS
                              DLAD DLAD
                              NMCARS NMCARS
                              Row 3
                                              SOFARS SOFARS
                              TRANSFARS TRANSFARS
                              AGAR AGAR
                              AIDAR AIDAR
                              CAR CAR
                              DEAR DEAR
                              DIAR DIAR
                              DOLAR DOLAR
                              Row 4
                                              DOSAR DOSAR
                              DTAR DTAR
                              EDAR EDAR
                              EPAAR EPAAR
                              FEHBAR FEHBAR
                              GSAM/R GSAM/R
                              HHSAR HHSAR
                              HSAR HSAR
                              Row 5
                                              HUDAR HUDAR
                              IAAR IAAR
                              JAR JAR
                              LIFAR LIFAR
                              NFS NFS
                              NRCAR NRCAR
                              TAR TAR
                              VAAR VAAR
                              Tools
                                                                        Archives
                              Smart Matrix
                              Regulations Search
                              Acquisition Regulation Comparator (ARC)
                              Policy Network
                                                                        CAOC
                              CAAC
                              FAR Council
                              ISDC
 Breadcrumb
        Home
                            Regulations
                            FAR
                            25.106           Determining reasonableness of             cost.
        
                  FAR
FAR
FAC Number: 2024-03 Effective Date: 02/23/2024
PartPart 1Part 2Part 3Part 4Part 5Part 6Part 7Part 8Part 9Part 10Part 11Part 12Part 13Part 14Part 15Part 16Part 17Part 18Part 19Part 20Part 21Part 22Part 23Part 24Part 25Part 26Part 27Part 28Part 29Part 30Part 31Part 32Part 33Part 34Part 35Part 36Part 37Part 38Part 39Part 40Part 41Part 42Part 43Part 44Part 45Part 46Part 47Part 48Part 49Part 50Part 51Part 52Part 53
Subpart25.025.125.225.325.425.525.625.725.825.925.1025.11
Section25.10025.10125.10225.10325.10425.10525.106
Leave this field blank
        
                  

                                
                  
        « PreviousNext »
25.106 Determining reasonableness of cost.25.106           Determining reasonableness of             cost.       (a) The contracting officer-                                                         (1) Must use the evaluation                         factors in paragraphs (b) and (c) of                            this                            section                         unless the head of the agency makes a written determination that the use of                         higher factors is more appropriate. If the determination applies to all                         agency acquisitions, the agency evaluation factors must be published in                         agency regulations; and                                                            (2) Must not apply                         evaluation factors to offers of eligible products if the acquisition is                         subject to a trade agreement under                              subpart  25.4.                                                                             (b)                   *For end products that are not critical items and do not contain critical                         components*.                                                         (1)                                                                           (i)                               If there is a domestic offer                                  that is not the low offer, and the restrictions of the Buy American                                  statute apply to the low offer, the contracting officer must                                  determine the reasonableness of the cost of the domestic offer by                                  adding to the price of the low offer, inclusive of duty—                                                                                             (A)                                     20 percent, if the lowest                                        domestic offer is from a large business concern; or                                                                                                (B)                                     30 percent, if the lowest                                        domestic offer is from a small business concern. The                                        contracting officer must use this factor, or another factor                                        established in agency regulations, in small business                                        set-asides if the low offer is from a small business concern                                        offering the product of a small business concern that is not                                        a domestic end product (see  subpart  19.5).                                                                                                                                         (ii)                               The price of the domestic offer                                  is reasonable if it does not exceed the evaluated price of the low                                  offer after addition of the appropriate evaluation factor in                                  accordance with paragraph (a) or (b)(1)(i) of this section. See                                  evaluation procedures at  subpart  25.5.                                                                                                           (2)                                                                           (i)                               For end products that are not                                  COTS items and do not consist wholly or predominantly of iron or                                  steel or a combination of both, if the procedures in paragraph                                  (b)(1)(i) of this section result in an unreasonable cost                                  determination for the domestic offer or there is no domestic offer                                  received, and the low offer is for a foreign end product that does                                  not exceed 55 percent domestic content, the contracting officer                                  shall—                                                                                             (A)                                     Treat the lowest offer of                                        a foreign end product that is manufactured in the United                                        States and exceeds 55 percent domestic content as a domestic                                        offer; and                                                                                                (B)                                     Determine the                                        reasonableness of the cost of this offer by applying the                                        evaluation factors listed in paragraph (b)(1)(i) of this                                        section to the low offer.                                                                                                                                         (ii)                               The price of the lowest offer of                                  a foreign end product that exceeds 55 percent domestic content is                                  reasonable if it does not exceed the evaluated price of the low                                  offer after addition of the appropriate evaluation factor in                                  accordance with paragraph (a) or (b)(1)(i) of this section. See                                  evaluation procedures at  subpart  25.5.                                                                              (iii)                               The procedures in this paragraph                                  (b)(2) will no longer apply as of January 1, 2030.                                                                                                                            (c)                   *For end products that are critical items or contain critical                      components*.                                                         (1)                                                                           (i)                               If there is a domestic offer                                  that is not the low offer, and the restrictions of the Buy American                                  statute apply to the low offer, the contracting officer shall                                  determine the reasonableness of the cost of the domestic offer by                                  adding to the price of the low offer, inclusive of duty—                                                                                             (A)                                     20 percent, plus the                                        additional preference factor identified for the critical item                                        or end product containing critical components listed at                                        section  25.105, if the lowest                                        domestic offer is from a large business concern; or                                                                                                (B) 30 percent,                                     plus the additional preference factor identified for the                                     critical item or end product containing critical components                                     listed at section  25.105, if the lowest                                     domestic offer is from a small business concern. The contracting                                     officer shall use this factor, or another factor established in                                     agency regulations, in small business set-asides if the low                                     offer is from a small business concern offering the product of a                                     small business concern that is not a domestic end product (see                                         subpart  19.5).                                                                                                                                         (ii)                               The price of the domestic offer                                  is reasonable if it does not exceed the evaluated price of the low                                  offer after addition of the appropriate evaluation factor in                                  accordance with paragraph (a) or (b) of this section. See                                  evaluation procedures at  subpart  25.5.                                                                                                           (2)                                                                           (i)                               For end products that are not                                  COTS items and do not consist wholly or predominantly of iron or                                  steel or a combination of both, if the procedures in paragraph                                  (c)(1)(ii) of this section result in an unreasonable cost                                  determination for the domestic offer or there is no domestic offer                                  received, and the low offer is for a foreign end product that does                                  not exceed 55 percent domestic content, the contracting officer                                  shall—                                                                                             (A)                                     Treat the lowest offer of                                        a foreign end product that is manufactured in the United                                        States and exceeds 55 percent domestic content as a domestic                                        offer; and                                                                                                (B)                                     Determine the                                        reasonableness of the cost of this offer by applying the                                        evaluation factors listed in paragraph (c)(1) of this section                                        to the low offer.                                                                                                                                         (ii)                               The price of the lowest offer of                                  a foreign end product that exceeds 55 percent domestic content is                                  reasonable if it does not exceed the evaluated price of the low                                  offer after addition of the appropriate evaluation factor in                                  accordance with paragraph (a) or (b) of this section. See                                  evaluation procedures at  subpart  25.5.                                                                              (iii)                               The procedures in this paragraph                                  (c)(2) will no longer apply as of January 1, 2030.    **Parent topic:**  Subpart 25.1 - Buy American-Supplies
« PreviousNext »
FavoriteX

      Far Parts
            Regulations FAR Menu
  

        
      Index
                              List of Sections Affected
                              DOD Deviations
                              CAAC Deviations
                              1
                              2
                              3
                              4
                              5
                              6
                              7
                              8
                              9
                              10
                              11
                              12
                              13
                              14
                              15
                              16
                              17
                              18
                              19
                              20
                              21
                              22
                              23
                              24
                              25
                              26
                              27
                              28
                              29
                              30
                              31
                              32
                              33
                              34
                              35
                              36
                              37
                              38
                              39
                              40
                              41
                              42
                              43
                              44
                              45
                              46
                              47
                              48
                              49
                              50
                              51
                              52
                              53
                              Chapter 99 (CAS)Definitions
    Toggle
FAC Changes
    Toggle
Style Formatter
    Toggle

      ×
        Data Initiatives
                                                              Regulations
                                                              Tools
                                              Archives
                                                              Smart Matrix
                                                              Regulations Search
                                                              Acquisition Regulation Comparator (ARC)
                                                              Policy Network
                                              CAO.gov
                                                        CAO Home
                                                              Council Member
                                                                    Large Agencies
                                                              Small Agencies
                                                              Council Defining Documents
                                                                    CAOC History
                                                              CAOC Charter
                                                              Civilian Agency Acquisition Council (CAAC)
                                                              Federal Acquisition Regulatory Council
                                                              Interagency Suspension and Debarment Committee (ISDC)
                                                              Search
 ˄ Top Sign up for FAR News

                            Share the FAR
                        Upper Footer Menu
  

        
      Useful Links
                              FAR Resources
                              Training
                              Acquisition Systems
            
                            **Contact Us/FAQs**
                        **Privacy and Security Notice**
                        **Accessibility Aids**
                        **Last Updated 03/29/2024**
 ACQUISITION.GOV
                An official website of the General Services Administration About GSA
                Accessibility support
                FOIA requests
                No FEAR Act data
                Office of the Inspector General
                Performance reports
                Privacy policy Looking for U.S. government information and services?
            Visit USA.gov
 «
    
    Tt