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