12780 Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Rules and Regulations 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Chapter 1 

[Docket No. FAR–2022–0051, Sequence No. 

2] 

Federal Acquisition Regulation; 

Federal Acquisition Circular 2022–05; 

Introduction 

AGENCY: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Summary presentation of a final 

rule. 

SUMMARY: This document summarizes 

the Federal Acquisition Regulation 

(FAR) rule agreed to by the Civilian 

Agency Acquisition Council and the 

Defense Acquisition Regulations 

Council (Councils) in this Federal 

Acquisition Circular (FAC) 2022–05. A 

companion document, the Small Entity 

Compliance Guide (SECG), follows this 

FAC. 

DATES: For effective date see the 

separate documents, which follow. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Mahruba Uddowla, Procurement 

Analyst, at 703–605–2868 or by email at 

mahruba.uddowla@gsa.gov, for 

clarification of content. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat Division at 202–501–4755 or 

GSARegSec@gsa.gov. Please cite FAC 

2022–05, FAR Case 2021–008. 

RULE LISTED IN FAC 2022–05 

Subject FAR case 

Amendments to the FAR Buy 

American Act—Requirements 2021–008 

ADDRESSES: The FAC, including the 

SECG, is available at https://

www.regulations.gov. 

SUPPLEMENTARY INFORMATION: A 

summary for the FAR rule follows. For 

the actual revisions and/or amendments 

made by this FAR rule, refer to the 

specific subject set forth in the 

document following this summary. FAC 

2022–05 amends the FAR as follows: 

Amendments to the FAR Buy American 

Act Requirements (FAR Case 2021–008) 

This final rule amends the Federal 

Acquisition Regulation (FAR) to 

implement section 8 of E.O. 14005, 

Ensuring the Future Is Made in All of 

America by All of America’s Workers. 

Upon the October 25, 2022, effective 

date, this final FAR rule changes the 

domestic content threshold to 60 

percent immediately, then to 65 percent 

for items delivered starting in calendar 

year 2024, and then to 75 percent for 

items delivered starting in calendar year 

2029. While a supplier that is awarded 

a contract with a period of performance 

that spans this schedule of domestic 

content threshold increases will be 

required to comply with each increased 

threshold for the items in the year of 

delivery, this rule allows for the agency 

senior procurement executive to apply 

an alternate domestic content test under 

which the contractor would be required 

to comply with the domestic content 

threshold in place at time of award for 

the entire life of the contract. 

This final rule also creates a fallback 

threshold that would allow for products 

and construction material meeting a 55 

percent domestic content threshold to 

qualify as ‘‘domestic’’ under certain 

circumstances. 

In addition, the final rule creates a 

framework for application of an 

enhanced price preference for a 

domestic product/domestic construction 

material that is considered a critical 

item or made up of critical components. 

The list of critical items and critical 

components, along with the associated 

enhanced price preference, will be 

incorporated in the FAR through 

separate rulemaking. 

William F. Clark, 

Director, Office of Government-wide 

Acquisition Policy, Office of Acquisition 

Policy, Office of Government-wide Policy. 

Federal Acquisition Circular (FAC) 

2022–05 is issued under the authority of 

the Secretary of Defense, the 

Administrator of General Services, and 

the Administrator of National 

Aeronautics and Space Administration. 

Unless otherwise specified, all 

Federal Acquisition Regulation (FAR) 

and other directive material contained 

in FAC 2022–05 is effective March 7, 

2022 except for FAR Case 2021–008, 

which is effective October 25, 2022. 

John M. Tenaglia, 

Principal Director, Defense Pricing and 

Contracting, Department of Defense. 

Jeffrey A. Koses, 

Senior Procurement Executive/Deputy CAO, 

Office of Acquisition Policy, U.S. General 

Services Administration. 

Karla Smith Jackson, 

Assistant Administrator for Procurement, 

Senior Procurement Executive, National 

Aeronautics and Space Administration. 

[FR Doc. 2022–04179 Filed 3–4–22; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 13, 25 and 52 

[FAC 2022–05; FAR Case 2021–008, Docket 

No. 2021–0008, Sequence No. 1] 

RIN 9000–AO22 

Federal Acquisition Regulation: 

Amendments to the FAR Buy American 

Act Requirements 

AGENCY: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: DoD, GSA, and NASA are 

issuing a final rule amending the 

Federal Acquisition Regulation (FAR) to 

implement an Executive order 

addressing domestic preferences in 

Government procurement. 

DATES: Effective: October 25, 2022. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Mahruba Uddowla, Procurement 

Analyst, at 703–605–2868 or by email at 

mahruba.uddowla@gsa.gov, for 

clarification of content. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat Division at 202–501–4755 or 

GSARegSec@gsa.gov. Please cite FAC 

2022–05, FAR Case 2021–008. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In his first week in office, President 

Biden signed Executive Order (E.O.) 

14005, Ensuring the Future is Made in 

All of America by All of America’s 

Workers, launching a whole-ofGovernment initiative to strengthen the 

use of Federal procurement to support 

American manufacturing. With over 

$600 billion in annual procurement 

spending, almost half of which is in 

manufactured products from helicopter 

blades to trucks to office furniture, the 

Federal Government is a major buyer in 

a number of markets for goods and 

services and the single largest purchaser 

of consumer goods in the world. 

Leveraging that purchasing power to 

shape markets and accelerate innovation 

is a key part of the Administration’s 

industrial strategy (https://www.atlantic

council.org/commentary/transcript/ 

brian-deese-on-bidens-vision-for-atwenty-first-century-americanindustrial-strategy/) to grow the 


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industries of the future to support U.S. 

workers, communities, and firms. 

On July 30, 2021, DoD, GSA, and 

NASA published a proposed rule at 86 

FR 40980 to implement section 8 of E.O. 

14005, which directs the Federal 

Acquisition Regulatory Council (FAR 

Council) to strengthen the impact of 

Federal procurement preferences in the 

Buy American statute for products and 

construction materials that are 

domestically manufactured from 

substantially all domestic content. 

Consistent with section 8, the proposed 

changes to the implementation of the 

Buy American statute were designed to 

support greater domestic production of 

products critical to our national and 

economic security and help ensure 

America’s workers thrive. This final rule 

makes limited changes from the 

proposed rule and amends the FAR to 

implement— 

• A near-term increase to the 

domestic content threshold following a 

short grace period during which 

contractors and the workforce prepare 

for the increase and a schedule for 

future increases; 

• A fallback threshold that would 

allow for products meeting a specific 

lower domestic content threshold to 

qualify as domestic products under 

certain circumstances; and 

• A framework for application of an 

enhanced evaluation factor (price 

preference) for a domestic product that 

is considered a critical item or made up 

of critical components. 

A. Increase to the Domestic Content 

Threshold 

This rule increases the domestic 

content threshold initially from 55 

percent to 60 percent, then to 65 percent 

in calendar year 2024 and to 75 percent 

in calendar year 2029. See FAR 

25.101(a)(2)(i) and 25.201(b)(2)(i). The 

initial increase to 60 percent will occur 

several months from publication of the 

final rule, to allow industry time to plan 

for the new threshold and to provide 

workforce training on the new fallback 

threshold. 

The increase of the domestic content 

threshold ultimately to 75 percent is 

consistent with the Infrastructure 

Investment and Jobs Act (Pub. L. 117– 

58) (IIJA) which was enacted on 

November 15, 2021. Section 70921 of 

this statute includes a ‘‘sense of 

Congress’’ that the FAR be amended to 

increase the domestic content 

requirements for domestic end products 

and domestic construction material to 

75 percent. 

A supplier that is awarded a contract 

with a period of performance that spans 

the schedule of domestic content 

threshold increases will be required to 

comply with each increased threshold 

for the items in the year of delivery. For 

example, a supplier awarded a five-year 

contract in 2027 will have to comply 

with the 65 percent domestic content 

threshold initially, but in 2030 will have 

to supply products with 75 percent 

domestic content. However, in response 

to comments received, in instances 

where this requirement to comply with 

changing domestic content thresholds 

throughout its life would not be feasible 

for a particular contract, the rule at FAR 

25.101(d) and 25.201(c) provides for a 

senior procurement executive to allow 

the application of an alternate domestic 

content test in defining ‘‘domestic end 

product’’ or ‘‘domestic construction 

material’’ after consultation with Office 

of Management and Budget’s Made in 

America Office (MIAO). The alternate 

domestic content test would allow the 

supplier to comply with the domestic 

content threshold that applies at the 

time of contract award, for the entire 

period of performance for that contract. 

The MIAO will work with the agencies 

to develop an appropriate process for 

consultation. 

B. Fallback Threshold 

This rule also allows, until one year 

after the increase of the domestic 

content threshold to 75 percent, for the 

use of the 55 percent domestic content 

threshold (i.e., the threshold in effect 

prior to the effective date of this rule) in 

instances where an agency has 

determined that there are no end 

products or construction materials that 

meet the new domestic content 

threshold or such products are of 

unreasonable cost. See FAR 25.106(b)(2) 

and (c)(2), and 25.204(b)(1)(ii) and 

(b)(2). For example, if a domestic end 

product that exceeds the 60 percent 

domestic content threshold is 

determined to be of unreasonable cost 

after application of the price preference, 

then for evaluation purposes the 

Government will treat an end product 

that is manufactured in the United 

States and exceeds 55 percent domestic 

content, but not 60 percent domestic 

content, as a domestic end product. The 

fallback threshold requires offerors to 

indicate which of their foreign end 

products exceed 55 percent domestic 

content. The fallback threshold only 

applies to construction material that 

does not consist wholly or 

predominantly of iron or steel or a 

combination of both and that are not 

commercially available off-the-shelf 

(COTS) items, as well as to end products 

that do not consist wholly or 

predominantly of iron or steel or a 

combination of both and that are not 

COTS items. 

Section 70921 of the IIJA also 

envisions use of a fallback threshold, 

and suggests that the threshold should 

be set at 60 percent and continue 

indefinitely, but does not mandate this 

approach; it is simply offered as a 

‘‘sense of Congress’’. 

This rule retains the approach to the 

fallback threshold set forth in the 

proposed rule: A consistent 55 percent 

threshold that is available until 2030 for 

use where domestic products at a higher 

threshold are not available or the cost to 

acquire them would be unreasonable. 

DoD, GSA, and NASA find this 

approach achieves the best balance 

between giving small disadvantaged 

businesses and other market 

participants a reasonable chance to 

adjust their supply chains to meet the 

higher content requirements and 

rewarding entities who lead their 

industries in adopting higher content 

levels. Equally important, sunsetting the 

fallback will send a clear signal to the 

Federal marketplace that the Federal 

Government is fully committed to 

suppliers who increase their reliance on 

domestic supply chains. Other 

Administration efforts to strengthen our 

economic and national security will 

support this transition to greater 

investment in domestic markets and 

make increased reliance on domestic 

supply chains feasible and desirable. 

These efforts include, among others, 

strategic actions by the Supply Chain 

Task Force pursuant to E.O. 14017 to 

address supply chain disruptions for 

critical products and components, 

investments in workforce training and 

apprenticeships by the Department of 

Labor to ensure workers can transition 

quickly and succeed in good quality 

jobs, and small business supports, 

including the creation of a 

manufacturing office at the Small 

Business Administration to help small 

manufacturers access Federal contracts, 

financing, and business development 

support. 

C. Enhanced Price Preference for 

Critical Products and Critical 

Components 

The rule provides for a framework 

through which higher price preferences 

will be applied to end products and 

construction material deemed to be 

critical or made up of critical 

components. A subsequent rulemaking 

will establish the definitive list at FAR 

25.105 of critical items and critical 

components in the FAR, along with 

their associated enhanced price 

preference(s). When a final rule goes 

into place establishing the list and 


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preference factors at 25.105, the higher 

price preference for critical items or 

critical components shall be used. 

The final rule does not include 

language from the proposed rule to 

require postaward reporting on the 

specific amount of domestic content in 

critical end products, construction 

material, or components receiving the 

enhanced price preference. Reporting 

remains a priority for helping the 

Federal Government more clearly 

understand the extent to which entities 

in its supplier base are increasing 

reliance on domestic sources for critical 

items and components. For this reason, 

coverage on this requirement will be 

deferred to the rulemaking that 

establishes the definitive list at FAR 

25.105 of critical items and critical 

components so that respondents can 

better understand and comment on the 

scope and scale of reporting and have 

that input considered by the regulatory 

drafters before a requirement is 

finalized. 

See the proposed rule for more 

information about the changes and 

about the Buy American statute (for its 

applicability and exceptions see 86 FR 

40980 at page 40981). 

Seventy respondents submitted 

comments on the proposed rule. 

II. Discussion and Analysis 

The Civilian Agency Acquisition 

Council and the Defense Acquisition 

Regulations Council (the Councils) 

reviewed the public comments in the 

development of the final rule. A 

discussion of the comments and the 

changes made to the rule as a result of 

those comments are provided as 

follows: 

A. Summary of Significant Changes 

The following significant changes 

from the proposed rule are made in the 

final rule: 

• Domestic content threshold grace 

period. The proposed rule envisioned 

an immediate increase to the domestic 

content threshold from 55 percent to 60 

percent, with the increase to 65 percent 

scheduled to begin in approximately 

two years in calendar year 2024 and the 

increase to 75 percent scheduled to 

begin five years after that increase, in 

calendar year 2029. In response to the 

comments received to the proposed 

rule, the Councils have provided for a 

delayed effective date (i.e., a grace 

period) before the initial increase to 60 

percent occurs in the final rule. 

Ordinarily, rules take effect 30 days 

after publication of the final rule. 

Delaying the effective date until after 

the beginning of the next fiscal year will 

allow industry to prepare for the new 

domestic content threshold and give the 

acquisition workforce time to be trained 

for the new concepts contained in this 

rule, helping to ensure a smoother 

transition to the rule’s new 

requirements. The schedule for 

domestic content threshold increases to 

65 percent and 75 percent remains 

unchanged from the proposed rule and 

is reflected in the amendments 

throughout FAR part 25 and to FAR 

clauses 52.225–1, 52.225–3, 52.225–9, 

and 52.225–11. 

• Use of an alternate domestic 

content test to apply the domestic 

content threshold in effect at contract 

award throughout the life of a contract. 

The proposed rule required a contract 

with a period of performance that spans 

the schedule of threshold increases to 

comply with each increased threshold 

for the items in the year of delivery. In 

response to the comments received to 

the proposed rule, the final rule adds a 

process by which an agency’s senior 

procurement executive may, after 

consultation with the MIAO, allow for 

application of an alternate domestic 

content test. In the event use of an 

alternate domestic content test is 

authorized, the contract would require 

compliance with the domestic content 

threshold in effect at time of contract 

award for the entire life of the contract. 

Amendments are made to FAR 25.101, 

25.201, 25.1101, and 25.1102 to 

implement the alternate domestic 

content test. Alternates to FAR clauses 

52.225–1, 52.225–3, 52.225–9, and 

52.225–11 are created for those 

contracts where use of an alternate 

domestic content test is authorized. Due 

to the new Alternates, conforming 

changes were made to FAR 13.302–5 

and FAR clauses 52.212–5 and 52.213– 

4. 

• Clarifications regarding application 

of the fallback threshold. As part of 

implementing the fallback threshold, 

the proposed rule would have required 

offerors to identify which of their 

foreign end products and foreign 

construction material met the fallback 

threshold. The final rule clarifies that 

this identification would only be 

required for end products and 

construction material where the fallback 

procedures are used, i.e., for end 

products and construction material that 

do ‘‘not consist wholly or 

predominantly of iron or steel or a 

combination of both’’ and are not COTS 

items. To reflect these clarifications, the 

final rule makes amendments at newlydesignated FAR 25.106 and 25.204; FAR 

provisions 52.212–3, 52.225–2, and 

52.225–4; and FAR clauses 52.225–9 

and 52.225–11. The proposed rule also 

did not contain any guidance on what 

the use of the fallback procedures would 

mean in relation to the procedures 

associated with exceptions to the Buy 

American statute, specifically the 

exception for nonavailability. Language 

has been added at FAR 25.103(b)(2)(i) 

and 25.202(a)(2), clarifying that a 

nonavailability determination is not 

required when the fallback procedures 

are used. 

• Postaward reporting requirement. 

The proposed rule included two new 

clauses that would require contractors 

to provide the specific domestic content 

of critical items, domestic end products 

containing a critical component, and 

domestic construction material 

containing a critical component, that 

were awarded under a contract. The 

final rule removes this requirement and 

will instead propose this requirement in 

the subsequent rule establishing the list 

of critical items and critical components 

in the FAR, along with their associated 

enhanced price preference. 

B. Analysis of Public Comments 

1. Support for the Rule 

Comment: Some respondents were 

supportive of the rule in general, though 

many had specific feedback—whether 

supportive or not—that is captured in 

the remaining categories of comments. 

One respondent was supportive of the 

rule as long as the Government still 

maintained a level of quality for the 

products it buys and protected against 

price gouging. Another respondent 

strongly recommends that the policy 

changes to the Buy American 

requirements closely align with U.S. 

national security objectives. 

Response: The Councils acknowledge 

the respondents’ support for the rule. 

2. Concerns With the Rule 

Comment: Some respondents 

expressed general concerns with the 

rule. These respondents did not believe 

the rule would impact their specific 

industry or entire manufacturing sector, 

believed the rule overcomplicates an 

already complicated process, or 

believed the Buy American statute itself 

and/or its existing implementation is 

already problematic. One respondent 

was concerned that the rule is too broad 

and that it may cause delays to 

acquisitions and increased pricing. One 

respondent believed the rule was overly 

burdensome and may invite 

protectionist policies from trading 

partners. A few respondents expressed 

concerns that the rule would have 

adverse results such as higher proposal 

prices and a reduction in the 

competitiveness of U.S. companies. 


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Response: The Councils acknowledge 

the respondents’ general concerns with 

the rule. The Councils address 

respondents’ feedback on specific 

aspects of the rule in the following 

categories of comments. 

3. Domestic Content Threshold 

Comment: Many respondents 

provided comments on the aspect of the 

rule that proposed increases to the 

domestic content threshold: 

Approximately half the respondents 

supported increasing the domestic 

content threshold over time, as 

proposed. One of these supported 

increasing the threshold only if the 

exception to the Buy American statute 

under the Trade Agreements Act 

remains. A couple of these respondents 

encouraged increasing the domestic 

content threshold to 75 percent earlier 

than the proposed date of 2029 (i.e., 

earlier than the proposed 7 years after 

the initial increase to 60 percent). The 

other half were not supportive of 

increasing the domestic content 

threshold over time. 

The majority of the respondents that 

were not supportive urged that the 

increases to the domestic content 

threshold happen over a longer period 

of time than proposed, as domestic 

suppliers cannot currently meet the 

higher thresholds and manufacturers 

would need more time to secure 

adequate domestic suppliers and make 

the requisite changes to their supply 

chains. According to one respondent, 

failure to provide industry the 

appropriate amount of preparation time 

to comply with the higher domestic 

content thresholds could result in 

‘‘material shortages, delayed deliveries, 

overextended suppliers, and 

inflationary pricing.’’ One of these 

respondents specifically recommended 

that the increases to the domestic 

content threshold happen in 3 to 5 year 

intervals, and another respondent asked 

that the increase occur over a 10-year 

span instead of 7 years, but the others 

did not provide specific alternate 

timeframes for consideration. 

Many of these respondents expressed 

concerns with possible unintended 

consequences of increasing the domestic 

content threshold to the amounts and 

along the timeline proposed. One 

concern is that the higher thresholds 

will cause increased costs for 

compliance, which will reduce the 

number of businesses that participate in 

the Federal marketplace, especially 

small businesses, thereby limiting the 

availability of domestic products and 

the competitiveness of innovative 

commercial products offered to the 

Federal Government. Another concern 

is that the imposition of higher domestic 

content thresholds will invite similar 

retaliatory actions from trading partners, 

which would limit U.S. businesses’ 

access to the global government 

procurement market. Some of the 

respondents expressed concerns specific 

to those U.S. businesses who maintain 

a global supply chain and/or those that 

participate both in the commercial 

marketplace and the Federal 

marketplace. According to these 

respondents, complying with the higher 

domestic content thresholds for the 

Federal market would cause these 

businesses to consider restructuring 

operations, including their supply 

chains, to separate commercial sales 

from Government sales. These 

respondents predict that such a 

separation would occur because the 

commercial market does not have 

similar requirements for domestic 

content and would not support the 

higher prices that would flow from 

compliance with such requirements. A 

couple of respondents also pointed out 

that instead of complying with the 

higher domestic content requirements, 

businesses could find it more beneficial 

to reduce their current level of domestic 

content in order to reduce their cost 

enough to make their foreign end 

product competitive even after 

application of the price preference 

provided by the Buy American statute to 

domestic products. 

A number of these respondents stated 

that the increased domestic content 

thresholds would be difficult, if not 

impossible, to comply with because of 

a shortage of available domestic 

components and subcomponents. 

A couple of the respondents believed 

that the higher domestic content 

thresholds would not promote U.S. 

manufacturing and would not 

accomplish the Administration’s stated 

objective. One of those respondents 

urged an adoption of the ‘‘substantial 

transformation’’ standard instead of the 

use of a component test. 

Response: The Councils believe that 

the concerns raised regarding the level 

and schedule for threshold increases are 

largely addressed by the fallback 

threshold, which recognizes that some 

market participants, especially 

socioeconomic small businesses from 

underserved communities and other 

small businesses, may need additional 

time beyond what is provided in the 

schedule to make adjustments to their 

supply chains. Those contractors that 

are not ready or otherwise make a 

business decision not to modify their 

supply chains will still be able to bid on 

Federal contracts and could still enjoy 

a price preference if their end product 

meets the current definition of domestic 

end product (i.e., exceeding 55 percent 

domestic content). In the event that the 

Government does not receive any offers 

of domestic end products or the 

domestic end products are of 

unreasonable cost, the Government will 

treat the end products that have at least 

55 percent domestic content as a 

domestic end product for evaluation 

purposes. See Section I.B. Fallback 

Threshold, earlier in this preamble. This 

approach will help prevent scheduled 

increases in the content threshold from 

taking work away from domestic 

suppliers who are actively adjusting 

their supply chains and avoid 

unintentionally raising the foreign 

content of Federal purchases through 

increased use of waivers. As more 

companies come into compliance with 

the higher thresholds over time, there 

will be a more competitive environment 

to sustain fair and reasonable pricing for 

products with higher domestic content. 

For these reasons, the final rule reflects 

the same threshold increases and 

schedule for those increases as the 

proposed rule. However, the Councils 

have decided to delay the effective date 

of the rule, which would delay 

implementation of the initial increase of 

the domestic content threshold to 60 

percent by several months. This short 

grace period is expected to allow more 

time for industry to prepare for the 

increased domestic content threshold. 

Comment: Some of the respondents 

expressed concerns with the aspect of 

the proposed rule which required that a 

supplier holding a contract with a 

period of performance that spans the 

schedule of domestic content threshold 

increases will be required to comply 

with each increased threshold for the 

items in the year of delivery. These 

respondents specifically called out 

indefinite-delivery, indefinite-quantity 

(IDIQ) contracts and fixed-price 

contracts as being adversely affected by 

such a requirement. A couple of these 

respondents explained that requiring a 

contract to comply with changing 

domestic content thresholds during the 

contract period of performance presents 

an administrative burden on contractors 

to track compliance through lower tiers, 

considering subcontractors and 

suppliers, as well as creating an 

administrative burden on both the 

Government and contractors in terms of 

having to renegotiate and modify the 

existing contracts to reflect the changing 

requirements. Another respondent 

believed that such a requirement placed 

an unreasonable burden on companies 

bidding on fixed-price contracts because 

these companies would need to identify 


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a supply chain that meets the highest 

domestic content requirement and price 

that out for its proposal although the 

highest requirement might be several 

years away. These respondents 

recommended that a contractor only be 

required to comply with a single 

domestic content threshold—the one in 

effect at award—throughout the 

performance period of a contract. 

Response: In light of the points raised 

by the public with regard to this 

requirement, the Councils acknowledge 

there are some instances where it is not 

feasible to require a contract that is 

subject to the Buy American statute to 

meet changing domestic content 

thresholds throughout its period of 

performance. In recognition of such 

instances, the final rule creates a 

process whereby an agency senior 

procurement executive, after 

consultation with the MIAO, may allow 

for application of an alternate domestic 

content test to the definition of 

‘‘domestic construction material’’ and 

‘‘domestic end product’’ and require the 

contractor to comply only with the 

domestic content threshold that is in 

effect at contract award for the entire 

contract term. 

Comment: One respondent asked for 

clarification regarding the applicability 

of the changes in the proposed rule to 

existing IDIQ contracts and other multiyear contracts. Specifically, the 

respondent asked whether the new 

requirements would apply to delivery 

orders issued after the effective date of 

this final rule against IDIQ contracts 

awarded prior to the effective date of 

this final rule. The respondent stated 

that because applying the new 

requirements would impact pricing for 

the IDIQ contractors, they recommend 

that orders include a price adjustments 

clause that would allow both agencies 

and contractors to deal with any price 

increases stemming from changing the 

domestic content requirements. 

Response: In accordance with the 

convention stated at FAR 1.108(d), FAR 

changes apply to existing contracts at 

the discretion of contracting officers, 

unless otherwise specified. This final 

rule does not otherwise specify a 

different application of the FAR change 

to existing contracts than the 

convention. 

4. Fallback Threshold 

Comment: A few respondents 

provided comments on the aspect of the 

rule that created the concept of a 

fallback threshold. Most of those 

comments were supportive. A couple of 

the respondents further recommended 

keeping the fallback threshold beyond 

the proposed one-year period after the 

last increase of the domestic content 

threshold. One of these respondents 

believed that companies would need 

more than one year to comply with the 

75 percent domestic content threshold 

while the other respondent believed that 

the fallback threshold should be used on 

an as-needed basis in the future to 

account for ‘‘periods of economic 

difficulty or increased input prices.’’ A 

few of these respondents recommended 

that the fallback threshold increase over 

time to match the increases to the 

domestic content threshold, i.e. fallback 

threshold increases from 55 percent to 

60 percent in 2024, and to 65 percent in 

2029. 

One of the respondents stated that 

while the fallback threshold allows time 

for companies to comply with the 

changing domestic content thresholds, it 

does not address the cost of the changes, 

such as those associated with 

engineering, vendor qualification, first 

article inspections, testing and fixturing, 

etc. The respondent recommended 

lower domestic content thresholds 

instead of a fallback threshold. With 

regard to the recommendation for 

increasing the fallback threshold over 

time to match the increases to the 

domestic content threshold, the 

respondent acknowledged that having 

multiple transitional thresholds and 

fallbacks would add complexity towards 

administration, supplier coordination, 

and associated reporting. Another 

respondent stated that the fallback 

threshold would not incentivize 

contractors because it does not address 

the issue of disparate product costs 

between the U.S. and lower-cost 

countries. Instead, this respondent 

recommended replacing the fallback 

threshold with a tiered system of price 

preferences, starting from a price 

preference to those contractors who 

have less than 35 percent domestic 

content and then scaling up to the 

highest tier of price preferences for 

those who have more than 90 percent 

domestic content. 

Response: Based on the 

predominantly supportive public 

comments for a fallback threshold, the 

congressional support for use of a 

fallback that is articulated in the sense 

of Congress in section 70921 of the IIJA, 

and the important role a fallback will 

play in giving small businesses and 

other market participants time to make 

adjustments to their supply chains, the 

Councils have retained in the final rule 

the concept and procedures for the 

fallback threshold from the proposed 

rule. The Councils believe the fallback 

threshold, as set forth in the proposed 

rule, should: (1) Help prevent scheduled 

increases in the content threshold from 

taking work away from domestic 

suppliers who are actively adjusting 

their supply chains; and (2) avoid 

unintentionally raising the foreign 

content of Federal purchases through 

increased use of waivers while domestic 

suppliers adjust. With regard to the 

recommendation that the fallback 

threshold increase over time to match 

the increases to the domestic content 

threshold, the Councils have 

determined that an increasing fallback 

threshold could, by adding complexity 

to the rule’s provisions, make firms’ 

efforts in supply chain coordination, 

solicitation certifications, and contract 

administration more difficult, rather 

than less. That said, the fallback 

threshold will be a temporary measure 

designed to limit foreign content while 

contractors transition to U.S.-based 

supply chains. 

5. Framework for Enhanced Price 

Preference for Critical Items and Critical 

Components 

Comment: Several respondents 

provided comments on the aspect of the 

rule that proposed a framework for 

providing enhanced price preferences 

for a domestic product that is 

considered a critical item or made up of 

critical components. 

About half of the respondents were 

supportive of the framework and 

concept. Many of these respondents 

recommended specific items or 

categories of items be added to the 

eventual FAR list of critical items and 

critical components: Hull, mechanical 

and electrical vessel components and 

systems, including engines and 

propulsion components; personal 

protective equipment; essential 

medicines; ammonium perchlorate and 

sodium perchlorate; tantalum and 

niobium; tungsten; titanium and 

superalloys; rare earths and material; 

and steel. One respondent 

recommended that the enhanced price 

preference be 25 percent for large 

businesses and 35 percent for small 

businesses, an addition of 5 percentage 

points to the current price preference 

provided in the FAR for acquisitions 

subject to the Buy American statute. 

One respondent was supportive of the 

concept as long as the exception to the 

Buy American statute under the Trade 

Agreements Act remains. Another 

respondent recommended that critical 

items and critical components be 

excluded from the United States’ trade 

obligations. That respondent also urged 

a ‘‘whole of Government’’ approach to 

the designation of items on the critical 

list, pointing out that E.O. 14005 

requires a review and update of the list 

of domestically nonavailable articles at 


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FAR section 25.104, which the 

respondent believes contains many 

items that are the ‘‘focus of the 

initiatives to strengthen U.S. supply 

chains and sources of critical inputs.’’ 

A few respondents expressed 

concerns with the concept of providing 

enhanced price preference for critical 

items and components. Some of the 

respondents stated that it was premature 

to create a framework and difficult to 

comment on the framework and 

evaluate its effect until the list of critical 

items and components, and their 

associated enhanced price preferences, 

are known. A few of the respondents 

believed that the concept seems to add 

administrative burden in terms of time 

and effort needed to track enhanced 

preferences, additional compliance 

costs for the U.S. Government and the 

Federal acquisition supply chain, and 

create unintended consequences. As 

alternatives to the concept, these 

respondents recommend instead 

providing contracting officers the ability 

to identify specific products or 

categories that will receive additional 

price preferences and then tailor their 

solicitation; or pursuing other public 

policies that would attempt to enhance 

domestic manufacturing by increasing 

access to highly-skilled affordable 

workforce, simplifying government 

regulations, or lowering the cost of raw 

materials and energy. As examples of 

such policies, respondents cited 

incentives like research and 

development investment credits, tax 

breaks, loans, subsidies, etc. 

A couple of respondents pointed out 

that providing enhanced price 

preferences would have limited benefit 

when there is only one supplier of a 

critical item; however, one of the 

respondents acknowledged that the 

enhanced price preference could be 

beneficial in encouraging domestic 

investment for critical items that are 

primarily imported. One respondent 

commented that identifying critical 

components would be difficult for 

design-build construction contracts and 

recommended exempting those types of 

contracts from this concept. Another 

respondent appeared to instead 

recommend that ‘‘electronic connectors, 

harness associated with the assembly, 

and cabling’’ be identified as items for 

the critical list. Another comment from 

this respondent was that any 

implementation of an enhanced price 

preference should be limited to the most 

critical and sensitive items; mandating a 

price preference could lead to the U.S. 

losing access to a superior product 

developed and produced by an ally. 

That respondent suggested that creating 

a ‘‘critical list’’ of items must include 

confirmation that a domestic supply is 

and will be available. 

One respondent, with regard to the 

proposed requirement for offerors to 

identify when a proposed end product 

contains a critical component, 

commented that the establishment of a 

separate representation process can 

create administrative burden and cost 

for vendors, as associated compliance 

mechanisms will be required to assure 

the accuracy of such separate 

representations. It was not clear to this 

respondent what benefit is achieved 

with the creation of this process, or 

whether any associated cost 

implications have been assessed. 

Another respondent commented that 

contractors are unable to comply with 

the ‘‘reporting requirements,’’ appearing 

to refer to the reporting requirement 

associated with identifying which 

offered item contains a critical 

component. 

Response: The Councils are retaining 

in the final rule the framework for 

enhanced price preference for critical 

items and critical components as 

contained in the proposed rule. The 

various recommendations for items/ 

components to be deemed critical will 

be shared with the appropriate parties 

that will make such decisions. 

The Councils note that the public will 

have another opportunity to provide 

feedback on this framework, and any 

associated reporting requirement(s), in 

the subsequent rulemaking that will 

establish the list of critical items and 

critical components in the FAR, along 

with their associated enhanced price 

preference. That separate FAR rule will 

present more context for the public to 

provide more informed feedback on the 

subject. 

Comment: As requested in the 

preamble of the proposed rule, a few of 

the respondents provided feedback on 

the process for identifying items and 

components for the critical list, the 

frequency of adjustments to the critical 

list, and how to apply the enhanced 

price preferences. 

Response: As stated in the proposed 

rule, establishing a list of critical items 

and critical components, along with 

their associated enhanced price 

preference, will be determined in a 

separate FAR rulemaking. The feedback 

provided by these respondents will be 

considered in the development of that 

separate/forthcoming FAR proposed 

rule. 

6. Postaward Reporting Requirement 

Comment: Several respondents 

provided comments on the aspect of the 

rule that proposed a requirement for 

postaward reporting on critical items 

and items containing critical 

components. 

A few respondents were supportive of 

the requirement. One respondent 

believed they could easily comply given 

that they have 100% domestic content 

but urged that the reporting requirement 

be designed in a way to be least 

burdensome on small businesses—for 

example, by making the reporting 

period no sooner than one year instead 

of 15 days. Another respondent stated 

that reporting is an effective way of 

ensuring greater compliance with the 

Buy American statute since 

transparency is a component of 

enforcement; this respondent further 

recommended that the reports be made 

public. One respondent, while 

supportive of the requirement as a first 

step, believed that it is too narrow in 

scope and that data related to contract 

adherence to the existing Buy American 

statute is inadequate. A couple of the 

respondents stated that reporting 

requirements associated with the Buy 

American statute already have very low 

difficulty of compliance, and it is 

unlikely that the proposed changes will 

significantly increase that burden on 

any businesses, small and 

disadvantaged or otherwise. One of 

these respondents recommended better 

transparency and public reporting be 

coupled with efforts to engage unions 

and shop floor workers in monitoring 

compliance with the Buy American 

statute. The respondent encouraged 

agencies to share information with 

unions, including compliance reports 

and the contracting agency’s 

expectations about where contract work, 

including the supply chain for 

manufactured supplies on Federal 

contracts, is being performed. 

A majority of the respondents that 

commented on the postaward reporting 

requirement expressed concern with the 

requirement. A number of the 

respondents stated that the full impact 

of the reporting requirement could not 

be known without first knowing how 

and what products and components will 

be listed as critical. One respondent 

provided an example that the burden of 

the requirement could be great if it 

turned out that there are ‘‘many critical 

components within various end items’’ 

or ‘‘there are many end products that 

contain a critical component’’; the 

respondent also pointed out that the 15- 

day reporting period could limit 

competition where contractors are 

furnishing end products with a lead 

time outside of the proposed reporting 

requirement. Another respondent urged 

the Councils to provide industry an 

opportunity to provide feedback on the 

proposed 15-day timeframe for reporting 


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once the list of critical items and 

components is established, because 

without knowing the scope and scale of 

the list, contractors will not know if that 

timeframe is feasible. 

Some of the respondents requested 

further clarity on the proposed 

requirement. One of the respondents 

asked what defines a critical item and 

what to do about reporting on contract 

‘‘obsolete items’’ or when the critical 

item list changes. Another respondent 

requested the Government clarify the 

‘‘types, detail, and level of reporting.’’ 

Another respondent asked whether a 

contractor’s ultimate inability to deliver 

a product with the domestic content 

amount specified in the report would be 

considered a breach of contract. 

Some of the respondents stated that 

the postaward reporting requirement 

would increase administrative burden 

and cost to contractors. One of these 

respondents specifically recommended 

that COTS products not be subject to the 

reporting requirement because it would 

result in a great deal of time and money 

spent. A couple of the respondents 

commented on potential negative 

impacts of the requirement. One of the 

respondents stated that increased 

reporting requirements, which flow 

down to subtiers, would make it more 

difficult for them to work with small 

businesses. The respondent explained 

that the reporting requirement would 

negatively impact small businesses 

because they would have to absorb the 

cost of validating the domestic content 

of all their components up front. This 

respondent also stated that the 

requirement would present a barrier to 

entry for many prospective suppliers. 

Another respondent stated that the 

requirement could limit competition 

where a contractor is furnishing an end 

product with a lead time that is outside 

the proposed reporting timeframe of 15 

days. This respondent stated that 

limited competition will also be likely 

due to the additional compliance costs 

and risks. According to this respondent, 

the requirement could result in 

increased prices from the Federal 

contracting community, which in turn 

could put them at a disadvantage with 

competitors in other markets, such as 

commercial markets. 

A few of the respondents pointed out 

the difficulty of obtaining country-oforigin information for components from 

their suppliers, who are either unwilling 

or unable to provide the necessary 

information. 

A few of the respondents expressed 

concerns over the security of the 

required information. One of these 

respondents worried about forcing 

equipment manufacturers to reveal 

potentially sensitive information about 

equipment manufacturing processes to 

the public, which could then be 

accessed by domestic and foreign 

competitors. A couple of the 

respondents also believed the required 

information is sensitive and critical, and 

that industry needs assurances that the 

information will be protected and 

secured. The respondents pointed out 

existing concerns about supply chain 

vulnerabilities, and that would-be 

adversaries as well as other contractors 

will want this competition-sensitive 

information. One of the respondents 

urged the Government to consider the 

relative sensitivity and security of the 

reported data and implement a plan to 

appropriately protect and secure it, 

possibly by imposing restrictions on 

public access to supply chain/ 

component data. This respondent stated 

that making the reported data accessible 

to the public could harm competition 

and create security concerns by forcing 

contractors to reveal key elements of a 

solution. 

Some of the respondents offered up 

alternatives to the proposed postaward 

reporting requirement. A couple of the 

respondents proposed alternatives to 

aspects of the proposed requirement, 

such as a longer timeframe for reporting 

than the proposed 15 days or 

simplification of the reporting lines (i.e. 

instead of having the pre-award 

certifications going to the contracting 

officer and the postaward reporting 

going to the MIAO). A few of the 

respondents proposed that instead of 

creating the reporting requirement, the 

Government should find other ways to 

accomplish its objective of gaining 

insight. One of the respondents 

recommended tailoring the Federal 

Procurement Data System (FPDS) and 

incentivizing contractors through 

something like a ‘‘Buy American 

certificate’’ into voluntarily providing 

the required data. Another respondent 

recommended leveraging or mirroring 

and modifying the Federal Trade 

Commission’s ‘‘Made in the USA’’ 

framework to implement domestic 

sourcing policies for Federal 

procurements. This respondent 

recommended that the MIAO establish a 

web portal or repository to enable a 

supplier that claims its product is 

‘‘Made in the USA’’ to voluntarily 

register their product claim. 

One of the respondents wanted an 

exception for design-build construction 

contracts, stating that the reporting 

requirement would be impractical for 

such a contract. Another respondent 

believed the reporting requirement 

would be difficult for contractors to 

meet if the reporting pertained to 

domestic content of components rather 

than the end item. One respondent 

proposed a system that they had created 

as the method for providing 

transparency into supply chains. One 

respondent commented that contractors 

are unable to comply with the 

‘‘reporting requirements.’’ 

Response: Reporting remains a 

priority because it will help the Federal 

Government more clearly understand 

the extent to which entities in its 

supplier base are increasing reliance on 

domestic sources for critical items and 

components. However, in light of the 

questions and concerns raised by the 

public in the absence of information, 

including a specific list of critical items 

and components, sufficient to convey 

the scope and scale of reporting that 

would be required, the Councils have 

determined to remove the requirement 

from this rule. Instead, the postaward 

reporting requirement will be included 

in the subsequent rulemaking planned 

for establishing the list of critical items 

and critical components in the FAR, 

along with their associated enhanced 

price preference. It is expected that 

when provided the context of an actual 

list of critical items and critical 

components, the public can provide 

more informed input for consideration 

by MIAO, Office of Federal Procurement 

Policy (OFPP), and other policy offices 

on how best to shape the reporting 

requirements. 

7. Comments on Other Topic Areas of 

E.O. 14005 

Comment: A majority of the 70 

respondents commented on topics that 

were highlighted in the preamble of the 

proposed rule as topics that pertain to 

other sections of E.O. 14005 than the 

one that is specifically being addressed 

in this particular FAR rule and on 

which public feedback was sought. 

These topics consisted of the 

commercial information technology 

acquisition exemption from the Buy 

American statute; the partial waiver for 

COTS items; Made in America services; 

the role of trade agreements; the use of 

waivers to the Buy American statute in 

general; the effectiveness of current 

price preferences under the Buy 

American statute; and replacing the 

component test. 

Response: The Councils appreciate 

the comments offered in response to the 

questions posed to help the FAR 

Council, MIAO, and other interested 

Federal offices understand the public’s 

views on important issues affecting 

Made in America policy beyond the 

actions addressed in this rulemaking. 

While no action is being taken in this 

FAR case with regard to the feedback 


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received on those areas, the FAR 

Council and the MIAO intend to 

consider the feedback received in those 

topic areas for other activities required 

by the E.O., as well as related initiatives 

to strengthen domestic supply chains. 

8. Outside the Scope of This Rule and 

Other Activities Under E.O. 14005 

Comment: Several respondents 

submitted comments that did not 

address any aspect of this rule or any 

other action by the FAR Council that is 

contemplated under E.O. 14005. These 

comments included complaints about 

the existing Buy American statute, 

existing FAR implementation of the Buy 

American statute, and specific 

procurement actions; recommendations 

for FAR changes that go beyond what is 

required by E.O. 14005 or authorized by 

any statute; marketing campaigns; and 

recommendations for non-procurement 

actions to incentivize domestic 

production. 

Response: The respondents’ 

comments are outside the scope of this 

FAR rule and are not necessary for 

implementation of section 8 of E.O. 

14005. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold (SAT) and for Commercial 

Products (Including Commercially 

Available Off-the-Shelf (COTS) Items) 

or for Commercial Services 

This rule amends the provisions and 

clauses at FAR— 

• 52.212–3, Offeror Representations 

and Certifications—Commercial 

Products and Commercial Services; 

• 52.213–4, Terms and Conditions— 

Simplified Acquisitions (Other Than 

Commercial Products and Commercial 

Services); 

• 52.225–1, Buy American— 

Supplies; 

• 52.225–2, Buy American Certificate; 

• 52.225–3, Buy American—Free 

Trade Agreements—Israeli Trade Act; 

• 52.225–4, Buy American—Free 

Trade Agreements—Israeli Trade Act 

Certificate; 

• 52.225–9, Buy American— 

Construction Materials; and 

• 52.225–11, Buy American— 

Construction Materials Under Trade 

Agreements. 

Those provisions and clauses 

continue to apply, or not apply, to 

acquisitions at or below the SAT, to 

acquisitions for commercial products 

(including COTS items), and to 

acquisitions of commercial services as 

they did prior to this rule. 

This rule creates alternates for the 

clauses at FAR— 

• 52.225–1, Buy American— 

Supplies; 

• 52.225–3, Buy American—Free 

Trade Agreements—Israeli Trade Act; 

• 52.225–9, Buy American— 

Construction Materials; and 

• 52.225–11, Buy American— 

Construction Materials Under Trade 

Agreements. 

These alternates continue to apply, or 

not apply, to acquisitions at or below 

the SAT, to acquisitions for commercial 

products (including COTS items), and to 

acquisitions of commercial services, as 

their basic clauses did prior to this rule. 

IV. Expected Impact of the Rule 

This rule adds two sets of changes to 

the FAR’s implementation of the Buy 

American statute: 

• An increase to the domestic content 

threshold that a product must meet to be 

defined as ‘‘domestic’’; a schedule for 

future increases (see FAR 25.101(a)(2)(i) 

and 25.201(b)(2)(i)); and a fallback 

threshold that would allow products 

meeting a specific lower domestic 

content threshold to qualify as a 

domestic product under certain 

circumstances (see FAR 25.106(b)(2) 

and (c)(2), and 25.204(b)(1)(ii) and 

(b)(2)); and 

• A framework for application of an 

enhanced price preference for a 

domestic product that is considered a 

critical product or made up of critical 

components (see FAR 25.106(c) and 

25.204(b)(2)). 

The impact of each set of changes is 

addressed individually below. DoD, 

GSA, and NASA sought information 

from the public to assist with this 

analysis. Feedback from the public was 

used to help further inform the 

regulatory drafters in the formation of 

this final rule. 

A. Scheduled Increase to the Domestic 

Content Threshold and the Use of a 

Fallback Threshold 

The fundamental goal of the rule is to 

increase the share of American-made 

content in a domestic end product or 

construction material. The graduated 

increase, after a grace period before the 

initial increase, is intended to drive to 

this goal in a proactive but measured 

fashion so that contractors have 

adequate time to make adjustments in 

their supply chains. When this rule is 

implemented, domestic industries 

supplying domestic end products are 

likely to benefit from a competitive 

advantage. 

Federal Procurement Data System 

(FPDS) data for fiscal year 2020 indicate 

there were 121,063 new contract awards 

for products and construction, valued 

over the micro-purchase threshold 

through the threshold at which the 

World Trade Organization Government 

Procurement Agreement applies, to 

which the Buy American statute 

applied. It is estimated that 37,503 of 

these awards were for COTS items. 

Because the domestic content threshold 

test does not apply to COTS items 

(except those involving iron/steel), 

those awards were subtracted from the 

121,063 total eligible awards. After 

removing potential COTS item 

acquisitions from the data, there are 

estimated to be 83,560 contract awards 

to 14,163 unique contractors. 

It is unclear if the pool of qualified 

suppliers would be reduced, resulting in 

less competition (and a possible 

increase in prices that the Government 

will pay to procure these products). The 

fallback threshold is intended to: (1) 

Help prevent scheduled increases in the 

content threshold from taking work 

away from domestic suppliers who are 

actively adjusting their supply chains; 

and (2) avoid unintentionally raising the 

foreign content of Federal purchases 

through increased use of waivers while 

domestic suppliers adjust. The fallback 

threshold will be a temporary measure 

designed to limit foreign content while 

contractors transition to U.S.-based 

supply chains. 

Based on responses received to the 

questions posed to the public, the FAR 

Council has considered implementing 

smaller increases in the content 

threshold as well as differently timed 

increases in the final rule, but 

determined that the size and schedule of 

the increases put forth in the proposed 

rule (i.e., initial increase to 60 percent, 

then increase to 65 percent in 2024, and 

then increase to 75 percent five years 

after the previous increase) reflect a 

reasonable approach to achieving the 

goals of section 8 of E.O. 14005 and 

increasing reliance on domestic supply 

chains. 

This determination was based on 

considerations such as potential impact 

on competition; potential impact on 

supplier diversity, including 

participation of small disadvantaged 

businesses and businesses in other 

underserved communities; lost 

opportunities for American workers; 

and other factors identified by public 

comment and other interested parties, 

including MIAO, which also has been 

considering the potential impact of the 

proposed rule. The Councils also 

considered the procurement provisions 

at issue and the sense of Congress 

expressed in the IIJA. 

At least three arguments point to the 

possibility that any increased burden 

with regard to the timed increase to the 

domestic content threshold, on 

contractors in particular, could be small 

if not de minimis. 


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First, DoD, GSA, and NASA do not 

anticipate significant cost arising from 

contractor familiarization with the rule 

given the history of rulemaking and 

E.O.s in this area. The basic mechanics 

of the Buy American statute (e.g., 

general definitions, certifications 

required of offerors to demonstrate end 

products are domestic) remain 

unchanged and continue to reflect 

processes that have been in place for 

decades. Under the proposed rule, when 

deciding whether to pursue a 

procurement or what kind of product 

mix (i.e., domestic or foreign) and 

pricing to propose in response to a 

solicitation, offerors now will have to 

plan for future changes to the domestic 

content threshold during the period of 

performance of the contemplated 

contract, unless use of an alternate 

domestic content threshold, which is 

the threshold in effect at time of 

contract award, has been authorized. 

Those offerors that make a business 

decision not to modify their supply 

chains over time to comply with the 

scheduled increases to the domestic 

content threshold will still be able to 

propose an offer for Federal contracts 

but will generally no longer enjoy a 

price preference. 

Second, some, if not many, 

contractors may already be able to 

comply with the higher domestic 

content requirement needed to meet the 

definition of domestic end product 

under E.O. 14005 and the final rule. 

Laws such as the SECURE Technology 

Act, Public Law 115–390, which 

requires a series of actions to strengthen 

the Federal infrastructure for managing 

supply chain risks, are placing 

significantly increased emphasis on the 

need for Federal agencies and Federal 

Government contractors to identify and 

reduce risk in their supply chains. One 

way to reduce supply chain risk is to 

increase domestic sourcing of content. A 

U.S. Bureau of Economic Analysis study 

using 2015 data, https://

www.commerce.gov/sites/default/files/ 

migrated/reports/2015-what-is-made-inamerica_0.pdf, found that on average, 

82 percent of the value of U.S. 

manufacturing output consists of 

domestic content. This indicates that a 

domestic content threshold of 60 

percent would not inflict additional 

burden on many contractors. Based on 

the assumption that the products 

purchased in 2021 will be similar to the 

products procured in the future, a 

preliminary analysis of available data in 

FPDS on the impact of an increase early 

in 2021 in the domestic content 

threshold from 50 percent to 55 percent 

did not reveal an uptick in waivers, 

suggesting companies may already be 

incorporating content that can meet at 

least the 55 percent level: 

Feb–Dec 2021 Feb–Dec 2020 Feb–Dec 2019 Feb–Dec 2018 

Total spend 

(millions of $) 

Total spend 

(millions of $) 

Total spend 

(millions of $) 

Total spend 

(millions of $) 

Total ......................................................................................... $36,137 $40,120 $40,948 $44,517 

Buy American Waived * ........................................................... $161 $177 $155 $166 

Percent Waived ....................................................................... 0.44% 0.44% 0.38% 0.37% 

* Waivers included here are Commercial Information Technology, Domestic Non-availability, Public Interest Determination, Resale, or Unreasonable Cost. They do not include waivers due to trade agreements or DoD qualifying country, which would not be impacted by a change in the 

content threshold. 

Third, it is anticipated that some 

contractors’ products and construction 

materials may not meet the definition of 

domestic end product and construction 

material unless the contractors take 

steps to adjust their supply chains to 

increase the domestic content. Those 

contractors that make a business 

decision not to modify their supply 

chains will still be able to bid on 

Federal contracts and could still enjoy 

a price preference if their end product 

meets the prior definition of domestic 

end product (i.e., exceeding 55 percent). 

In the event that the Government does 

not receive any offers of domestic end 

products or the domestic end products 

are of unreasonable cost, the 

Government will treat the end products 

that have at least 55 percent domestic 

content as a domestic end product for 

evaluation purposes. Offerors now have 

an information collection burden of 

identifying when a foreign end product 

meets the fallback threshold (see section 

VIII of this preamble), but that burden 

should be offset by the benefit of 

potentially still receiving a price 

preference for those end products that 

would have been considered domestic 

prior to the increases to the domestic 

content threshold implemented in this 

rule. 

Offerors have an option to increase 

their reliance on domestic content and 

continue to offer domestic products, in 

which case they may benefit from the 

price preference for domestic products, 

or they may continue to offer the same 

product, which will now be evaluated 

as foreign but may still benefit from a 

price preference. DoD, GSA, and NASA 

do not have any data on how many 

currently domestic products would fall 

into this category or have any 

knowledge as to which option an offeror 

of such products would select, since 

this is a business decision for each 

offeror to make. 

In recognition of the feedback 

provided by the public, DoD, GSA, and 

NASA have decided to delay the 

effective date of this rule by several 

months. The expectation is that this 

grace period will allow the contracting 

community more time to plan for the 

new threshold and prepare for the new 

procedures. Coupled with the 

implementation of the fallback 

threshold, the grace period should help 

to minimize any increased burden 

associated with the higher domestic 

content thresholds. 

B. Enhanced Price Preference for 

Critical Items 

The goal of the enhanced price 

preference for critical items and 

components is to provide a steady 

source of demand for domestically 

produced critical products. As 

explained above, the rule only creates a 

framework. A separate rulemaking will 

be undertaken to add critical products 

and components to the FAR and to 

establish the associated preferences. 

Therefore, the impact associated with 

this concept will be captured in the 

subsequent rulemaking. 

There is an information collection 

burden associated with offerors 

identifying when a domestic end 

product or domestic construction 

material contains a critical component 

(see section VIII of this preamble), but 

that burden should be offset by the 

larger price preference received for 

these items. 

Therefore, based on public comments 

received, DoD, GSA, and NASA have 

concluded that the initial assessment is 

correct that the cost impact of this rule 

is not significant, and any impact is 

predominantly positive. 


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Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Rules and Regulations 12789 

V. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is a significant 

regulatory action and, therefore, was 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. 

VI. Congressional Review Act 

As required by the Congressional 

Review Act (5 U.S.C. 801–808) before an 

interim or final rule takes effect, DoD, 

GSA, and NASA will send the rule and 

the ‘‘Submission of Federal Rules Under 

the Congressional Review Act’’ form to 

each House of the Congress and to the 

Comptroller General of the United 

States. A major rule cannot take effect 

until 60 days after it is published in the 

Federal Register. The Office of 

Information and Regulatory Affairs 

(OIRA) in the Office of Management and 

Budget has determined that this is not 

a major rule under 5 U.S.C. 804. 

VII. Regulatory Flexibility Act 

DoD, GSA, and NASA have prepared 

a Final Regulatory Flexibility Analysis 

(FRFA) consistent with the Regulatory 

Flexibility Act, 5 U.S.C. 601–612. The 

FRFA is summarized as follows: 

DoD, GSA, and NASA are amending the 

Federal Acquisition Regulation (FAR) to 

implement an Executive Order regarding 

ensuring the future is made in all of America 

by all of America’s workers. 

The objective of this rule is to strengthen 

domestic preferences under the Buy 

American statute, as required by section 8 of 

E.O. 14005, Ensuring the Future is Made in 

All of America by All of America’s Workers, 

by providing— 

• An increase to the domestic content 

threshold required to be met for a product to 

be defined as ‘‘domestic’’ and a schedule for 

future increases; 

• A fallback threshold which would allow 

for products meeting a specific lower 

domestic content threshold to qualify as a 

domestic product under certain 

circumstances; and 

• A framework for application of an 

enhanced price preference for a domestic 

product that is considered a critical product 

or made up of critical components. 

One respondent commented that they 

disagreed with the statement in the Initial 

Regulatory Flexibility Analysis (IRFA) that 

the rule will not have significant economic 

impact on a substantial number of small 

entities. The respondent believed the public 

burden of information collection created by 

the proposed reporting requirements was 

significantly more than what the IRFA 

estimated. Specifically, the respondent 

believed the aspect of the rule which 

increases the domestic content threshold 

over time will impact contractors more than 

that stated in the IRFA as the estimated time 

required for compliance. 

Since no data were provided by the 

respondent with regard to the estimated 

burden for the various information collection 

requirements created by this rule, the 

estimate was not revised. However, the final 

rule does remove the postaward reporting 

requirement so estimates related to that have 

been removed from this final regulatory 

flexibility analysis. 

With regard to the comment that the IRFA 

did not account for the additional 

compliance efforts that small businesses will 

need to apply for the increases to the 

domestic content threshold over time, this 

final regulatory flexibility analysis 

acknowledges that impact. 

Different parts of the rule are expected to 

apply to a different number and universe of 

small entities. The impacted small entities, 

by portion of the rule, are described below. 

But in general, the rule will apply to 

contracts subject to the Buy American 

statute. The statute does not apply to 

services, or overseas, nor does it apply to 

acquisitions of micro-purchases (contracts at 

or below $10,000) or to acquisitions to which 

certain trade agreements apply (e.g. World 

Trade Organization Government Procurement 

Agreement (WTO GPA)). The maximum 

possible number of small entities to which 

the rule will apply are the 31,103 active 

small business registrants in the System for 

Award Management (SAM) who do not 

provide services. 

—Timed increase to the domestic content 

threshold and allowance of a fallback 

threshold. Federal Procurement Data 

System (FPDS) data for fiscal year 2020 

indicates there were 86,490 new contract 

awards to small business for products and 

construction materials, valued over the 

micro-purchase threshold through the 

threshold at which the WTO GPA applies, 

to which the Buy American statute 

applied. It is estimated that 24,459 of these 

awards were for commercially available 

off-the-shelf (COTS) items. Because the 

domestic content threshold test does not 

apply to COTS items (except those 

involving iron/steel), those awards were 

subtracted from the 86,490 total eligible 

awards. After removing potential COTS 

item acquisitions from the data, there are 

estimated to be 62,031 contract awards to 

11,704 unique small businesses. In 

recognition of the feedback provided by the 

public, DoD, GSA, and NASA have 

decided to delay the effective date of this 

rule by several months. The expectation is 

that this grace period will allow the 

contracting community more time to 

acclimate to the new threshold and prepare 

for the new procedures. Coupled with the 

implementation of the fallback threshold, 

the grace period should minimize any 

increased burden associated with the 

higher domestic content thresholds. 

—Enhanced preference for a critical product 

or component. This rule only creates a 

framework. Separate rulemaking will be 

done to add critical products and 

components to the FAR and to establish 

the associated preferences. However, the 

Government assumes that 10 percent of the 

contract awards subject to Buy American 

statute will be for critical products or 

components. Therefore, the Government 

estimates that 8,649 (10 percent of 86,490) 

of awards to small businesses may be 

impacted. This translates to 1,632 unique 

small businesses. 

The final rule will strengthen domestic 

preferences under the Buy American statute 

and provide small businesses the opportunity 

and incentive to deliver U.S. manufactured 

products from domestic suppliers. It is 

expected that this rule will benefit U.S. 

manufacturers. 

This rule does not include any new 

recordkeeping or other compliance 

requirements for small businesses. Prior to 

this rule, small businesses already had to 

monitor compliance with contract 

requirements pertaining to the domestic 

content threshold for contracted items. 

However, the increases in the domestic 

content threshold implemented in this rule 

may result in disruption to existing 

contractor supply chains across impacted 

contracts, which in turn, may require more 

effort on small businesses to monitor 

compliance. 

This rule does contain a few additional 

reporting requirements for certain offerors, 

including small businesses. 

Small businesses who submit an offer for 

a solicitation subject to the Buy American 

statute already have to list the foreign end 

products included in their offer. This rule 

will require that the offeror also identify 

which of these foreign end products, that are 

not COTS items and do not consist wholly 

or predominantly of iron or steel or a 

combination of both, meet or exceed the 

fallback domestic content threshold. This 

rule will also require proposals to identify 

which offered domestic end products contain 

a critical component. Without that 

information, contracting officers will not be 

able to apply the ‘‘enhanced price 

preference’’ when applicable. These 

reporting requirements are not specific to 

small businesses so data does not exist to 

estimate the number of small businesses 

subject to these requirements. However, the 

data suggests that there will be 

approximately 8,800 impacted respondents 

total, small and other than small. 

There are no known significant alternative 

approaches to the final rule. 

Interested parties may obtain a copy 

of the FRFA from the Regulatory 

Secretariat Division. The Regulatory 

Secretariat Division has submitted a 

copy of the FRFA to the Chief Counsel 

for Advocacy of the Small Business 

Administration. 


khammond on DSKJM1Z7X2PROD with RULES2
12790 Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Rules and Regulations 

VIII. Paperwork Reduction Act 

The Paperwork Reduction Act (44 

U.S.C. 3501–3521) applies. The rule 

contains information collection 

requirements. OMB has provided preapproval of the revised information 

collection requirements under OMB 

Control Number 9000–0024, Buy 

American, Trade Agreements, and DutyFree Entry. 

The proposed rule contained a new 

information collection requirement that 

is no longer included in this final rule. 

As such, the Regulatory Secretariat 

Division has withdrawn its request to 

the Office of Management and Budget 

for approval of a new information 

collection requirement concerning 

‘‘Domestic Content Reporting 

Requirement.’’ 

List of Subjects in 48 CFR Parts 13, 25, 

and 52 

Government procurement. 

William F. Clark, 

Director, Office of Government-Wide 

Acquisition Policy, Office of Acquisition 

Policy, Office of Government-Wide Policy. 

Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 13, 25, and 52 as 

set forth below: 

■ 1. The authority citation for 48 CFR 

parts 13, 25, and 52 continues to read 

as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 51 U.S.C. 20113. 

PART 13—SIMPLIFIED ACQUISITION 

PROCEDURES 

■ 2. Amend section 13.302–5 by 

revising paragraph (d)(3)(i) and adding 

paragraph (d)(4) to read as follows: 

13.302–5 Clauses. 

* * * * * 

(d) * * * 

(3) * * * 

(i) When an acquisition for supplies 

for use within the United States cannot 

be set aside for small business concerns 

and trade agreements apply (see subpart 

25.4), substitute the clause at FAR 

52.225–3, Buy American-Free Trade 

Agreements-Israeli Trade Act, used with 

the appropriate Alternate (see 

25.1101(b)(1)), instead of the clause at 

FAR 52.225–1, Buy American-Supplies. 

* * * * * 

(4) When the senior procurement 

executive allows for application of an 

alternate domestic content test for the 

contract in accordance with 25.101(d), 

so that the initial domestic content 

threshold will apply to the entire period 

of performance, the contracting officer 

shall fill in the 52.213–4(b)(1)(xvii)(B) 

for 52.225–1 Alternate I as follows: For 

contracts that the contracting officer 

estimates will be awarded in calendar 

year 2022 or 2023, the contracting 

officer shall insert ‘‘60’’ in paragraph 

(1)(ii)(A) of the definition of domestic 

end product. For contracts that the 

contracting officer estimates will be 

awarded in calendar year 2024, 2025, 

2026, 2027, or 2028, the contracting 

officer shall insert ‘‘65’’. For contracts 

that the contracting officer estimates 

will be awarded after calendar year 2028 

the contracting officer shall insert ‘‘75’’. 

PART 25—FOREIGN ACQUISITION 

■ 3. Amend section 25.003 by— 

■ a. Adding in alphabetical order 

definitions for ‘‘Critical component’’ 

and ‘‘Critical item’’; 

■ b. In the definition ‘‘Domestic 

construction material’’ revising the first 

sentence of paragraph (1)(i)(B)(1); and 

■ c. In the definition ‘‘Domestic end 

product’’ revising the first sentence of 

paragraph (1)(ii)(A). 

The additions and revisions read as 

follows: 

25.003 Definitions. 

* * * * * 

Critical component means a 

component that is mined, produced, or 

manufactured in the United States and 

deemed critical to the U.S. supply 

chain. The list of critical components is 

at 25.105. 

Critical item means a domestic 

construction material or domestic end 

product that is deemed critical to the 

U.S. supply chain. The list of critical 

items is at 25.105. 

* * * * * 

Domestic construction material * * * 

(1) * * * 

(i) * * * 

(B) * * * 

(1) The cost of the components mined, 

produced, or manufactured in the 

United States exceeds 60 percent of the 

cost of all its components, except that 

the percentage will be 65 percent for 

items delivered in calendar years 2024 

through 2028 and 75 percent for items 

delivered starting in calendar year 2029 

(unless an alternate percentage is 

established for a contract in accordance 

with FAR 25.201(c)). * * * 

* * * * * 

Domestic end product * * * 

(1) * * * 

(ii) * * * 

(A) The cost of its components mined, 

produced, or manufactured in the 

United States exceeds 60 percent of the 

cost of all its components, except that 

the percentage will be 65 percent for 

items delivered in calendar years 2024 

through 2028 and 75 percent for items 

delivered starting in calendar year 2029 

(unless an alternate percentage is 

established for a contract in accordance 

with FAR 25.101(d)). * * * 

* * * * * 

■ 4. Amend section 25.100 by— 

■ a. Removing the word ‘‘and’’ at the 

end of paragraph (a)(3); 

■ b. Redesignating paragraph (a)(4) as 

(a)(5); and 

■ c. Adding a new paragraph (a)(4). 

The addition reads as follows: 

25.100 Scope of subpart. 

(a) * * * 

(4) Executive Order 14005, January 

25, 2021; and 

* * * * * 

■ 5. Amend section 25.101 by— 

■ a. Removing from paragraph (a) 

introductory text the phrase ‘‘Buy 

American statute and E.O. 13881’’ and 

adding the phrase ‘‘Buy American 

statute, E.O. 13881, and E.O. 14005’’ in 

its place; 

■ b. Revising the first sentence of 

paragraph (a)(2)(i); and 

■ c. Adding paragraph (d). 

The revision and addition read as 

follows: 

25.101 General. 

(a) * * * 

(2)(i) Except for an end product that 

consists wholly or predominantly of 

iron or steel or a combination of both, 

the cost of domestic components shall 

exceed 60 percent of the cost of all the 

components, except that the percentage 

will be 65 percent for items delivered in 

calendar years 2024 through 2028 and 

75 percent for items delivered starting 

in calendar year 2029. But see paragraph 

(d) of this section. * * * 

* * * * * 

(d)(1) A contract with a period of 

performance that spans the schedule of 

domestic content threshold increases 

specified in paragraph (a)(2)(i) of this 

section shall be required to comply with 

each increased threshold for the items 

in the year of delivery, unless the senior 

procurement executive of the 

contracting agency allows for 

application of an alternate domestic 

content test for that contract under 

which the domestic content threshold in 

effect at time of contract award will 

apply to the entire period of 

performance for the contract. This 

authority is not delegable. The senior 

procurement executive shall consult the 

Office of Management and Budget’s 

Made in America Office before allowing 

the use of the alternate domestic content 

test. 

(2) When a senior procurement 

executive allows for application of an 


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Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Rules and Regulations 12791 

alternate domestic content test for a 

contract— 

(i) See 25.1101(a)(1)(ii) or 

25.1101(b)(1)(v) for use of the 

appropriate Alternate clause to reflect 

the domestic content threshold that will 

apply to the entire period of 

performance for that contract; and 

(ii) Use the fill-in at 52.213– 

4(b)(1)(xvii)(B) instead of including 

52.225–1 Alternate I when using 

52.213–4, Terms and Conditions— 

Simplified Acquisitions (Other Than 

Commercial Products and Commercial 

Services). 

■ 6. Amend section 25.103 by— 

■ a. Adding a sentence to the end of 

paragraph (b)(2)(i); and 

■ b. Removing from paragraph (c) 

‘‘25.105’’ and ‘‘Subpart 25.5’’ and 

adding ‘‘25.106’’ and ‘‘subpart 25.5’’ in 

their places, respectively. 

The addition reads as follows: 

25.103 Exceptions. 

* * * * * 

(b) * * * 

(2) * * * 

(i) * * * A determination is not 

required before January 1, 2030, if there 

is an offer for a foreign end product that 

exceeds 55 percent domestic content 

(see 25.106(b)(2) and 25.106(c)(2)). 

* * * * * 

25.105 [Redesignated as 25.106] 

■ 7. Redesignate section 25.105 as 

section 25.106. 

■ 8. Add a new section 25.105 to read 

as follows: 

25.105 Critical components and critical 

items. 

(a) The following is a list of articles 

that have been determined to be a 

critical component or critical item and 

their respective preference factor(s). 

(1)–(2) [Reserved] 

(b) The list of articles and preference 

factors in paragraph (a) of this section 

will be published in the Federal 

Register for public comment no less 

frequently than once every 4 years. 

Unsolicited recommendations for 

deletions from this list may be 

submitted at any time and should 

provide sufficient data and rationale to 

permit evaluation (see 1.502). 

(c) For determining reasonableness of 

cost for domestic end products that 

contain critical components or are 

critical items (see 25.106(c)). 

■ 9. Amend newly redesignated section 

25.106 by— 

■ a. In paragraph (a)(1) removing the 

phrase ‘‘paragraph (b) of this section’’ 

and adding the phrase ‘‘paragraphs (b) 

and (c) of this section’’ in its place; 

■ b. In paragraph (a)(2) removing the 

word ‘‘Subpart’’ and adding the word 

‘‘subpart’’ in its place; and 

■ c. Revising paragraphs (b) and (c). 

The revisions read as follows: 

25.106 Determining reasonableness of 

cost. 

* * * * * 

(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. 


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12792 Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Rules and Regulations 

(iii) The procedures in this paragraph 

(c)(2) will no longer apply as of January 

1, 2030. 

■ 10. Amend section 25.200 by— 

■ a. In paragraph (a)(3) removing the 

word ‘‘and’’; 

■ b. Redesignating paragraph (a)(4) as 

paragraph (a)(5); 

■ c. Adding a new paragraph (a)(4); and 

■ d. In paragraph (c) removing the word 

‘‘Subpart’’ and adding the word 

‘‘subpart’’ in its place. 

The addition reads as follows: 

25.200 Scope of subpart. 

(a) * * * 

(4) Executive Order 14005, January 

25, 2021; and 

* * * * * 

■ 11. Amend section 25.201 by— 

■ a. Removing from paragraph (b) 

introductory text the phrase ‘‘statute 

and E.O. 13881 use’’ and adding the 

phrase ‘‘statute, E.O. 13881, and E.O. 

14005 use’’ in its place; 

■ b. Revising the first sentence of 

paragraph (b)(2)(i); and 

■ c. Adding paragraph (c). 

The revision and addition read as 

follows. 

25.201 Policy. 

* * * * * 

(b) * * * 

(2)(i) Except for construction material 

that consists wholly or predominantly 

of iron or steel or a combination of both, 

the cost of domestic components must 

exceed 60 percent of the cost of all the 

components, except that the percentage 

will be 65 percent for items delivered in 

calendar years 2024 through 2028 and 

75 percent for items delivered starting 

in calendar year 2029, but see paragraph 

(c) of this section. * * * 

* * * * * 

(c)(1) A contract with a period of 

performance that spans the schedule of 

domestic content threshold increases 

specified in paragraph (b)(2)(i) of this 

section shall be required to comply with 

each increased threshold for the items 

in the year of delivery, unless the senior 

procurement executive of the 

contracting agency allows for 

application of an alternate domestic 

content test for that contract under 

which the domestic content threshold in 

effect at time of contract award will 

apply to the entire period of 

performance for the contract. This 

authority is not delegable. The senior 

procurement executive shall consult the 

Office of Management and Budget’s 

Made in America Office before allowing 

the use of the alternate domestic content 

test. 

(2) When a senior procurement 

executive allows for application of an 

alternate domestic content test for a 

contract, see 25.1102(a)(3) or (c)(4) for 

use of the appropriate Alternate clause 

to reflect the domestic content threshold 

that will apply to the entire period of 

performance for that contract. 

■ 12. Amend section 25.202 by adding 

a sentence to the end of paragraph (a)(2) 

to read as follows: 

25.202 Exceptions. 

(a) * * * 

(2) * * * A determination is not 

required before January 1, 2030, if there 

is an offer for a foreign construction 

material that exceeds 55 percent 

domestic content (see 25.204(b)(1)(ii) 

and 25.204(b)(2)(ii)). 

* * * * * 

■ 13. Amend section 25.204 by revising 

paragraph (b) to read as follows: 

25.204 Evaluating offers of foreign 

construction material. 

* * * * * 

(b)(1) For construction material that is 

not a critical item and does not contain 

critical components. (i) Unless the head 

of the agency specifies a higher 

percentage, the contracting officer shall 

add to the offered price 20 percent of 

the cost of any foreign construction 

material proposed for exception from 

the requirements of the Buy American 

statute based on the unreasonable cost 

of domestic construction materials. In 

the case of a tie, the contracting officer 

shall give preference to an offer that 

does not include foreign construction 

material excepted at the request of the 

offeror on the basis of unreasonable 

cost. 

(ii) For construction material that is 

not a COTS item and does 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 

construction material offer or there is no 

domestic construction material offer 

received, and the low offer is for foreign 

construction material that does not 

exceed 55 percent domestic content, the 

contracting officer shall— 

(A) Treat the lowest offer of foreign 

construction material 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 factor listed in paragraph 

(b)(1)(i) to the low offer. 

(iii) The procedures in paragraph 

(b)(1)(ii) of this section will no longer 

apply as of January 1, 2030. 

(2) For construction material that is a 

critical item or contains critical 

components. (i) The contracting officer 

shall add to the offered price 20 percent, 

plus the additional preference factor 

identified for the critical item or 

construction material containing critical 

components listed at section 25.105, of 

the cost of any foreign construction 

material proposed for exception from 

the requirements of the Buy American 

statute based on the unreasonable cost 

of domestic construction materials. In 

the case of a tie, the contracting officer 

shall give preference to an offer that 

does not include foreign construction 

material excepted at the request of the 

offeror on the basis of unreasonable 

cost. See 25.105 for the list of critical 

components and critical items. 

(ii) For construction material that is 

not a COTS item and does not consist 

wholly or predominantly of iron or steel 

or a combination of both, if the 

procedures in paragraph (b)(2)(i) of this 

section result in an unreasonable cost 

determination for the domestic 

construction material offer or there is no 

domestic construction material offer 

received, and the low offer is for foreign 

construction material that does not 

exceed 55 percent domestic content, the 

contracting officer shall— 

(A) Treat the lowest offer of foreign 

construction material 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 this 

paragraph (b)(2) to the low offer. 

(iii) The procedures in paragraph 

(b)(2)(ii) of this section will no longer 

apply as of January 1, 2030. 

* * * * * 

25.501 [Amended] 

■ 14. Amend section 25.501 by— 

■ a. Removing from paragraph (c) the 

word ‘‘Subpart’’ and adding the word 

‘‘subpart’’ in its place; and 

■ b. Removing from paragraph (d) the 

word ‘‘Must’’ and adding the phrase 

‘‘When trade agreements are involved, 

must’’ in its place. 

■ 15. Amend section 25.502 by revising 

paragraphs (c)(2) and (3) and (c)(4) 

introductory text to read as follows: 

25.502 Application. 

* * * * * 

(c) * * * 

(2) If the low offer is a noneligible 

offer and there were no domestic offers 

(see 25.103(b)(3)), award on the low 

offer. The procedures at 25.106(b)(2) 

and 25.106(c)(2) do not apply. 

(3) If the low offer is a noneligible 

offer and there is an eligible offer that 


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is lower than the lowest domestic offer, 

award on the low offer. The procedures 

at 25.106(b)(2) and 25.106(c)(2) do not 

apply. 

(4) Otherwise, apply the appropriate 

evaluation factor provided in 25.106 to 

the low offer. The procedures at 

25.106(b)(2) and 25.106(c)(2) do not 

apply. 

* * * * * 

■ 16. Amend section 25.503 by— 

■ a. Removing from paragraph (a)(1) the 

word ‘‘Subpart’ and adding the word 

‘‘subpart’’ in its place; and 

■ b. Adding paragraph (d). 

The addition reads as follows: 

25.503 Group offers. 

* * * * * 

(d) If no trade agreement applies to a 

solicitation and the solicitation specifies 

that award will be made only on a group 

of line items or all line items contained 

in the solicitation, determine the 

category of end products (i.e., domestic 

or foreign) on the basis of each line 

item, but determine whether to apply an 

evaluation factor on the basis of the 

group of items (see 25.504–4(c), 

Example 3). 

(1) If the proposed price of domestic 

end products exceeds 50 percent of the 

total proposed price of the group, 

evaluate the entire group as a domestic 

offer. Evaluate all other groups as 

foreign offers. 

(2) Apply the evaluation factor to the 

entire group in accordance with 25.502, 

except where 25.502(c)(4) applies and 

the evaluated price of the low offer 

remains less than the lowest domestic 

offer. Where the evaluated price of the 

low offer remains less than the lowest 

domestic offer, treat as a domestic offer 

any group where the proposed price of 

end products with a domestic content of 

at least 55 percent exceeds 50 percent of 

the total proposed price of the group. 

(3) Apply the evaluation factor to the 

entire group in accordance with 

25.502(c)(4). 

■ 17. Amend section 25.504–1 by— 

■ a. In the table in paragraph (a)(1), 

revising the entry for ‘‘Offer C’’; 

■ b. Revising paragraph (a)(2); and 

■ c. Adding paragraph (c). 

The revision and addition read as 

follows: 

25.504–1 Buy American statute. 

(a)(1) * * * 

*******

Offer C ....................................................... $10,100 U.S.-made end product (not domestic), small business. 

(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 $25,000 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)). 

* * * * * 

(c)(1) Example 3. 

Offer A ...................................................... $14,000 Domestic end product (complies with the required domestic content), small business. 

Offer B ...................................................... 12,500 U.S.-made end product (not domestic, exceeds 55% domestic content), small business. 

Offer C ...................................................... 10,100 U.S.-made end product (not domestic, with less than 55% domestic content), small 

business. 

(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 $25,000 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. 

■ 18. Amend section 25.504–4 by 

adding paragraph (c) to read as follows: 

25.504–4 Group award basis. 

* * * * * 

(c) Example 3. 

Item 

Offers 

A B C 

1 ..................................................... DO = $17,800 ............................... FO (>55%) = $16,000 .................. FO (<55%) = $11,200. 

2 ..................................................... FO (>55%) = $9,000 .................... FO (>55%) = $8,500 .................... DO = $10,200. 

3 ..................................................... FO (<55%) = $11,200 .................. FO (>55%) = $12,000 .................. FO (<55%) = $11,000. 

4 ..................................................... DO = $10,000 ............................... DO = $9,000 ................................. FO (<55%) = $6,400. 

Total ........................................ $48,000 ......................................... $45,500 ......................................... $38,800. 

Key: 

DO = Domestic end product (complies with the required domestic content). 

FO > 55% = Foreign end product with domestic content exceeding 55%. 

FO < 55% = Foreign end product with domestic content of 55% or less. 


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Problem: The solicitation specifies 

award on a group basis. Assume only 

the Buy American statute applies (i.e., 

no trade agreements apply) and the 

acquisition cannot be set aside for small 

business concerns. All offerors are large 

businesses. 

Analysis: (see 25.503(d)) 

STEP 1: Determine which of the offers 

are domestic (see 25.503(d)(1)): 

Domestic 

(percent) Determination 

A .................................... $17,800 (Offer A1) + $10,000 (Offer A4) = $27,800 ...........................................................................

$27,800/$48,000 (Offer A Total) = 58% ...............................................................................................

Domestic. 

B .................................... $9,000 (Offer B4)/$45,500 (Offer B Total) = 19.8% ............................................................................ Foreign. 

C .................................... $10,200 (Offer C2)/$38,800 (Offer C Total) = 26.3% .......................................................................... Foreign. 

STEP 2: Determine which offer, 

domestic or foreign, is the low offer. If 

the low offer is a foreign offer, apply the 

evaluation factor (see 25.503(d)(2)). The 

low offer (Offer C) is a foreign offer. 

Therefore, apply the factor to the low 

offer. Addition of the 20 percent factor 

(use 30 percent if Offer A is a small 

business) to Offer C yields an evaluated 

price of $46,560 ($38,800 + 20 percent). 

Offer C remains the low offer. 

STEP 3: Determine if there is a foreign 

offer that could be treated as a domestic 

offer (see 25.106(b)(2) and 25.503(d)(2)). 

Amount of domestic content 

(percent) Determination 

A ............................... N/A .................................................................................................................................. N/A. 

B ............................... $9,000 (Offer B4)/$45,500 (Offer B Total) $ = 19.8% is domestic ................................ Can be treated as domestic. 

AND 

$16,000 (Offer B1) + $8,500 (Offer B2) + $12,000 (Offer B3) = $36,500.

$36,500/$45,500 (Offer B Total) = 80.2% can be treated as domestic.

19.8% + 80.2% = 100% is domestic or can be treated as domestic.

C ............................... $10,200 (Offer C2)/$38,800 (Offer C Total) = 26.3% is domestic ................................. Foreign. 

STEP 4: If there is a foreign offer that 

could be treated as a domestic offer, 

compare the evaluated price of the low 

offer to the price of the offer treated as 

domestic (see 25.503(d)(3)). Offer B can 

be treated as a domestic offer ($45,500). 

The evaluated price of the low offer 

(Offer C) is $46,560. Award on Offer B. 

■ 19. Amend section 25.1101 by— 

■ a. Redesignating paragraphs (a)(1)(i) 

through (iii) as paragraphs (a)(1)(i)(A) 

through (C); 

■ b. Redesignating paragraph (a)(1) 

introductory text as paragraph (a)(1)(i); 

and 

■ c. Adding paragraphs (a)(1)(ii) and 

(b)(1)(v). 

The additions read as follows: 

25.1101 Acquisition of supplies. 

* * * * * 

(a)(1) * * * 

(ii) The contracting officer shall use 

the clause with its Alternate I to reflect 

the domestic content threshold that will 

apply to the entire period of 

performance, when the senior 

procurement executive allows for 

application of an alternate domestic 

content test for the contract in 

accordance with 25.101(d). For 

contracts that the contracting officer 

estimates will be awarded in calendar 

year 2022 or 2023, the contracting 

officer shall insert ‘‘60’’ in paragraph 

(1)(ii)(A) of the definition of ‘‘domestic 

end product.’’ For contracts that the 

contracting officer estimates will be 

awarded in calendar year 2024, 2025, 

2026, 2027, or 2028, the contracting 

officer shall insert ‘‘65’’. For contracts 

that the contracting officer estimates 

will be awarded after calendar year 2028 

the contracting officer shall insert ‘‘75’’. 

* * * * * 

(b)(1) * * * 

(v) The contracting officer shall use 

the clause with its Alternate IV to reflect 

the domestic content threshold that will 

apply to the entire period of 

performance, when the senior 

procurement executive allows for 

application of an alternate domestic 

content test for the contract in 

accordance with 25.102(d). For 

contracts that the contracting officer 

estimates will be awarded in calendar 

year 2022 or 2023, the contracting 

officer shall insert ‘‘60’’ in paragraph 

(1)(ii)(A) of the definition of ‘‘domestic 

end product.’’ For contracts that the 

contracting officer estimates will be 

awarded in calendar year 2024, 2025, 

2026, 2027, or 2028, the contracting 

officer shall insert ‘‘65’’. For contracts 

that the contracting officer estimates 

will be awarded after calendar year 2028 

the contracting officer shall insert ‘‘75’’. 

* * * * * 

■ 20. Amend section 25.1102 by adding 

paragraphs (a)(3) and (c)(4) to read as 

follows: 

25.1102 Acquisition of construction. 

* * * * * 

(a) * * * 

(3) The contracting officer shall use 

the clause with its Alternate I to reflect 

the domestic content threshold that will 

apply to the entire period of 

performance, when the senior 

procurement executive allows for 

application of an alternate domestic 

content test for the contract in 

accordance with 25.201(c). For contracts 

that the contracting officer estimates 

will be awarded in calendar year 2022 

or 2023, the contracting officer shall 

insert ‘‘60’’ in paragraph (1)(ii)(A) of the 

definition of ‘‘domestic construction 

material.’’ For contracts that the 

contracting officer estimates will be 

awarded in calendar year 2024, 2025, 

2026, 2027, or 2028, the contracting 

officer shall insert ‘‘65’’. For contracts 

that the contracting officer estimates 

will be awarded after calendar year 2028 

the contracting officer shall insert ‘‘75’’. 

* * * * * 

(c) * * * 

(4) The contracting officer shall use 

the clause with its Alternate II to reflect 

the domestic content threshold that will 

apply to the entire period of 

performance, when the senior 

procurement executive allows for 

application of an alternate domestic 

content test for the contract in 

accordance with 25.201(c). For contracts 

that the contracting officer estimates 

will be awarded in calendar year 2022 

or 2023, the contracting officer shall 

insert ‘‘60’’ in paragraph (1)(ii)(A) of the 


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definition of ‘‘domestic construction 

material.’’ For contracts that the 

contracting officer estimates will be 

awarded in calendar year 2024, 2025, 

2026, 2027, or 2028, the contracting 

officer shall insert ‘‘65’’. For contracts 

that the contracting officer estimates 

will be awarded after calendar year 2028 

the contracting officer shall insert ‘‘75’’. 

* * * * * 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 21. Amend section 52.212–3 by— 

■ a. Revising the date of the provision; 

■ b. In paragraph (f)(1)(i) removing the 

word ‘‘product’’ and adding the phrase 

‘‘product and that each domestic end 

product listed in paragraph (f)(3) of this 

provision contains a critical 

component’’ in its place; 

■ c. Adding two sentences to the end of 

paragraph (f)(1)(ii); 

■ d. Redesignating paragraph (f)(1)(iii) 

as paragraph (f)(1)(iv) and adding a new 

paragraph (f)(1)(iii); 

■ e. Removing from the newly 

redesignated paragraph (f)(1)(iv) the 

phrase ‘‘The terms ‘‘domestic end 

product,’’ ’’ and adding the phrase ‘‘The 

terms ‘‘commercially available off-theshelf (COTS) item,’’ ‘‘critical 

component,’’ ‘‘domestic end product,’’ ’’ 

in its place; 

■ f. Revising the table in paragraph 

(f)(2); 

■ g. Redesignating paragraph (f)(3) as 

paragraph (f)(4) and adding a new 

paragraph (f)(3); 

■ h. In the newly redesignated 

paragraph (f)(4) removing the word 

‘‘Part’’ and adding the word ‘‘part’’ in its 

place; 

■ i. In paragraph (g)(1)(i)(A) removing 

second occurrence of the word 

‘‘product’’ and adding the phrase 

‘‘product and that each domestic end 

product listed in paragraph (g)(1)(iv) of 

this provision contains a critical 

component’’ in its place; 

■ j. In paragraph (g)(1)(i)(B) removing 

the phrases ‘‘Peruvian end product,’’ 

‘‘domestic end product,’’ ’’ and adding 

in their places the phrases ‘‘Peruvian 

end product,’’ ‘‘commercially available 

off-the-shelf (COTS) item,’’ ‘‘critical 

component,’’ ‘‘domestic end 

product,’’ ’’; 

■ k. Adding two sentences at the end of 

paragraph (g)(1)(iii) introductory text 

and revising the table; 

■ l. Redesignating paragraph (g)(1)(iv) as 

paragraph (g)(1)(v) and adding a new 

paragraph (g)(1)(iv); and 

■ m. In the newly redesignated 

paragraph (g)(1)(v) removing the word 

‘‘Part’’ and adding the word ‘‘part’’ in its 

place. 

The revisions and additions read as 

follows: 

52.212–3 Offeror Representations and 

Certifications—Commercial Products and 

Commercial Services. 

* * * * * 

Offeror Representations and 

Certifications—Commercial Products 

and Commercial Services (OCT 2022) 

* * * * * 

(f) * * * 

(1) * * * 

(ii) * * * For those foreign end products 

that do not consist wholly or predominantly 

of iron or steel or a combination of both, the 

Offeror shall also indicate whether these 

foreign end products exceed 55 percent 

domestic content, except for those that are 

COTS items. If the percentage of the domestic 

content is unknown, select ‘‘no’’. 

(iii) The Offeror shall separately list the 

line item numbers of domestic end products 

that contain a critical component (see FAR 

25.105). 

* * * * * 

(2) * * * 

Line Item No. Country of origin Exceeds 55% domestic content 

(yes/no) 

[List as necessary] 

(3) Domestic end products containing a 

critical component: 

Line Item No. lll 

[List as necessary] 

* * * * * 

(g)(1) * * * 

(iii) * * * For those foreign end products 

that do not consist wholly or predominantly 

of iron or steel or a combination of both, the 

Offeror shall also indicate whether these 

foreign end products exceed 55 percent 

domestic content, except for those that are 

COTS items. If the percentage of the domestic 

content is unknown, select ‘‘no’’. 

Other Foreign End Products: 

Line Item No. Country of origin Exceeds 55% domestic content 

(yes/no) 

[List as necessary] 

(iv) The Offeror shall list the line item 

numbers of domestic end products that 

contain a critical component (see FAR 

25.105). 

Line Item No. lll 

[List as necessary] 

* * * * * 

■ 22. Amend section 52.212–5 by— 

■ a. Revising the date of the clause; 

■ b. Redesignating paragraph (b)(48) as 

paragraph (b)(48)(i) and removing from 

the newly redesignated paragraph 

(b)(48)(i) the date ‘‘(NOV 2021)’’ and 

adding ‘‘(OCT 2022)’’ in its place; 

■ c. Adding paragraph (b)(48)(ii); 

■ d. Removing from paragraph (b)(49)(i) 

the date ‘‘(NOV 2021)’’ and adding 

‘‘(OCT 2022)’’ in its place; and 

■ e. Adding paragraph (b)(49)(v). 

The revision and additions read as 

follows: 

52.212–5 Contract Terms and Conditions 

Required To Implement Statutes or 

Executive Orders—Commercial Products 

and Commercial Services. 

* * * * * 

Contract Terms and Conditions 

Required To Implement Statutes or 

Executive Orders—Commercial 

Products and Commercial Services 

(OCT 2022) 

* * * * * 

(b) * * * 

ll(48) * * * 


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ll(ii) Alternate I (OCT 2022) of 52.225– 

1. 

ll(49) * * * 

ll(v) Alternate IV (OCT 2022) of 52.225– 

3. 

* * * * * 

■ 23. Amend section 52.213–4 by— 

■ a. Revising the date of the clause; 

■ b. Redesignating paragraphs 

(b)(1)(xvii)(A) and (B) as paragraphs 

(b)(1)(xvii)(A)(1) and (2) and 

redesignating paragraph (b)(1)(xvii) 

introductory text as paragraph 

(b)(1)(xvii)(A) and; 

■ c. In the newly redesignated 

paragraph (b)(1)(xvii)(A) removing the 

date ‘‘(NOV 2021)’’ and adding ‘‘(OCT 

2022)’’ in its place; and 

■ d. Adding paragraph (b)(1)(xvii)(B); 

The revision and addition read as 

follows: 

52.213–4 Terms and Conditions— 

Simplified Acquisitions (Other Than 

Commercial Products and Commercial 

Services). 

* * * * * 

Terms and Conditions—Simplified 

Acquisitions (Other Than Commercial 

Products and Commercial Services) 

(OCT 2022) 

(b) * * * 

(1) * * 

(xvii) * * * 

(B) Alternate I (OCT 2022) (Applies if the 

Contracting Officer has filled in the domestic 

content threshold below, which will apply to 

the entire contract period of performance. 

Substitute the following sentence for the first 

sentence of paragraph (1)(ii)(A) of the 

definition of domestic end product in 

paragraph (a) of 52.225–1: 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds ll percent of the cost of all 

its components. [Contracting officer to insert 

the percentage per instructions at 13.302– 

5(d)(4).]) 

* * * * * 

■ 24. Amend section 52.225–1 by— 

■ a. Revising the date of the clause; 

■ b. Adding in alphabetical order a 

definition for ‘‘Critical component’’ in 

paragraph (a); 

■ c. In paragraph (a), in the definition of 

‘‘Domestic end product’’ revising the 

first sentence of paragraph (1)(ii)(A); 

and 

■ d. Adding Alternate I to the end of the 

section. 

The revisions and additions read as 

follows: 

52.225–1 Buy American—Supplies. 

* * * * * 

Buy American—Supplies (OCT 2022) 

(a) * * * 

Critical component means a component 

that is mined, produced, or manufactured in 

the United States and deemed critical to the 

U.S. supply chain. The list of critical 

components is at FAR 25.105. 

Domestic end product * * * 

(1) * * * 

(ii) * * * 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds 60 percent of the cost of all 

its components, except that the percentage 

will be 65 percent for items delivered in 

calendar years 2024 through 2028 and 75 

percent for items delivered starting in 

calendar year 2029. * * * 

* * * * * 

Alternate I (OCT 2022). As prescribed in 

25.1101(a)(1)(ii) substitute the following 

sentence for the first sentence of paragraph 

(1)(ii)(A) of the definition of ‘‘domestic end 

product’’ in paragraph (a): 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds ll percent of the cost of all 

its components. [Contracting officer to insert 

the percentage.] 

■ 25. Amend section 52.225–2 by— 

■ a. Revising the date of the provision; 

■ b. Revising paragraph (a)(1); 

■ c. Adding two sentences at the end of 

paragraph (a)(2); 

■ d. Redesignating paragraph (a)(3) as 

paragraph (a)(4) and adding a new 

paragraph (a)(3); 

■ e. In newly redesignated paragraph 

(a)(4) removing the phrase ‘‘The terms’’ 

and adding the phrase ‘‘The terms 

‘‘commercially available off-the-shelf 

(COTS) item,’’ ‘‘critical component,’’ ’’ 

in its place; 

■ f. Revising the table in paragraph (b); 

■ g. Redesignating paragraph (c) as 

paragraph (d) and adding a new 

paragraph (c). 

The revisions and additions read as 

follows: 

52.225–2 Buy American Certificate. 

* * * * * 

Buy American Certificate (OCT 2022) 

(a)(1) The Offeror certifies that each end 

product, except those listed in paragraph (b) 

of this provision, is a domestic end product 

and that each domestic end product listed in 

paragraph (c) of this provision contains a 

critical component. 

(2) * * * For those foreign end products 

that do not consist wholly or predominantly 

of iron or steel or a combination of both, the 

Offeror shall also indicate whether these 

foreign end products exceed 55 percent 

domestic content, except for those that are 

COTS items. If the percentage of the domestic 

content is unknown, select ‘‘no’’. 

(3) The Offeror shall separately list the line 

item numbers of domestic end products that 

contain a critical component (see FAR 

25.105). 

* * * * * 

(b) * * * 

Line Item No. Country of origin Exceeds 55% domestic content 

(yes/no) 

[List as necessary] 

(c) Domestic end products containing a 

critical component: 

Line Item No. lll 

[List as necessary] 

* * * * * 

■ 26. Amend section 52.225–3 by— 

■ a. Revising the date of the clause; 

■ b. Adding in alphabetical order a 

definition for ‘‘Critical component’’ in 

paragraph (a); 

■ c. In paragraph (a), in the definition 

‘‘Domestic end product’’ revising the 

first sentence of paragraph (1)(ii)(A); 

and 

■ d. Adding Alternate IV. 

The revisions and additions read as 

follows: 

52.225–3 Buy American—Free Trade 

Agreements—Israeli Trade Act. 

* * * * * 

Buy American—Free Trade 

Agreements—Israeli Trade Act (OCT 

2022) 

(a) * * * 

Critical component means a component 

that is mined, produced, or manufactured in 

the United States and deemed critical to the 

U.S. supply chain. The list of critical 

components is at FAR 25.105. 

Domestic end product * * * 

(1) * * * 

(ii) * * * 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds 60 percent of the cost of all 

its components, except that the percentage 

will be 65 percent for items delivered in 

calendar years 2024 through 2028 and 75 


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percent for items delivered starting in 

calendar year 2029. * * * 

* * * * * 

Alternate IV (OCT 2022). As prescribed in 

25.1101(b)(1)(v) substitute the following 

sentence for the first sentence of paragraph 

(1)(ii)(A) of the definition of domestic end 

product in paragraph (a): 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds ll percent of the cost of all 

its components. [Contracting officer to insert 

the percentage.] 

■ 27. Amend section 52.225–4 by— 

■ a. Revising the date of the provision; 

■ b. Revising paragraph (a)(1); 

■ c. In paragraph (a)(2) removing the 

phrases ‘‘Peruvian end product,’’ 

‘‘domestic end product,’’’’ and adding in 

their places ‘‘Peruvian end product,’’ 

‘‘commercially available off-the-shelf 

(COTS) item,’’ ‘‘critical component,’’ 

‘‘domestic end product,’’’’; 

■ d. Redesignating paragraph (c) as 

paragraph (c)(1) and adding two 

sentences at the end of newly 

designated paragraph (c)(1); 

■ e. Revising the table in newly 

designated paragraph (c)(1); and 

■ f. Adding paragraph (c)(2). 

The revisions and additions read as 

follows: 

52.225–4 Buy American—Free Trade 

Agreements—Israeli Trade Act Certificate. 

* * * * * 

Buy American—Free Trade 

Agreements—Israeli Trade Act 

Certificate (OCT 2022) 

(a)(1) The Offeror certifies that each end 

product, except those listed in paragraph (b) 

or (c)(1) of this provision, is a domestic end 

product and that each domestic end product 

listed in paragraph (c)(2) of this provision 

contains a critical component. 

* * * * * 

(c)(1) * * * For those foreign end products 

that do not consist wholly or predominantly 

of iron or steel or a combination of both, the 

Offeror shall also indicate whether these 

foreign end products exceed 55 percent 

domestic content, except for those that are 

COTS items. If the percentage of the domestic 

content is unknown, select ‘‘no’’. 

* * * * * 

Line Item No. Country of origin Exceeds 55% domestic content 

(yes/no) 

* * * * * 

(2) The Offeror shall list the line item 

numbers of domestic end products that 

contain a critical component (see FAR 

25.105). 

Line Item No. lll 

[List as necessary] 

* * * * * 

■ 28. Amend section 52.225–9 by— 

■ a. Revising the date of the clause; 

■ b. Adding in alphabetical order 

definitions for ‘‘Critical component’’ 

and ‘‘Critical item’’; 

■ c. In the definition ‘‘Domestic 

construction material’’ revising the first 

sentence of paragraph (1)(ii)(A); 

■ d. Revising paragraph (b)(3)(i); and 

■ e. Adding Alternate I to the end of the 

section. 

The revisions and additions read as 

follows: 

52.225–9 Buy American—Construction 

Materials. 

* * * * * 

Buy American—Construction Materials 

(OCT 2022) 

(a) * * * 

Critical component means a component 

that is mined, produced, or manufactured in 

the United States and deemed critical to the 

U.S. supply chain. The list of critical 

components is at FAR 25.105. 

Critical item means a domestic 

construction material or domestic end 

product that is deemed critical to U.S. supply 

chain resiliency. The list of critical items is 

at FAR 25.105. 

Domestic construction material * * * 

(1) * * * 

(ii) * * * 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds 60 percent of the cost of all 

its components, except that the percentage 

will be 65 percent for items delivered in 

calendar years 2024 through 2028 and 75 

percent for items delivered starting in 

calendar year 2029. * * * 

* * * * * 

(b) * * * 

(3) * * * 

(i) The cost of domestic construction 

material would be unreasonable. 

(A) For domestic construction material that 

is not a critical item or does not contain 

critical components. 

(1) The cost of a particular domestic 

construction material subject to the 

requirements of the Buy American statute is 

unreasonable when the cost of such material 

exceeds the cost of foreign material by more 

than 20 percent; 

(2) For construction material that is not a 

COTS item and does not consist wholly or 

predominantly of iron or steel or a 

combination of both, if the cost of a 

particular domestic construction material is 

determined to be unreasonable or there is no 

domestic offer received, and the low offer is 

for foreign construction material that is 

manufactured in the United States and does 

not exceed 55 percent domestic content, the 

Contracting Officer will treat the lowest offer 

of foreign construction material that exceeds 

55 percent domestic content as a domestic 

offer and determine whether the cost of that 

offer is unreasonable by applying the 

evaluation factor listed in paragraph 

(b)(3)(i)(A)(1) of this clause. 

(3) The procedures in paragraph 

(b)(3)(i)(A)(2) of this clause will no longer 

apply as of January 1, 2030. 

(B) For domestic construction material that 

is a critical item or contains critical 

components. (1) The cost of a particular 

domestic construction material that is a 

critical item or contains critical components, 

subject to the requirements of the Buy 

American statute, is unreasonable when the 

cost of such material exceeds the cost of 

foreign material by more than 20 percent plus 

the additional preference factor identified for 

the critical item or construction material 

containing critical components listed at FAR 

25.105. 

(2) For construction material that does not 

consist wholly or predominantly of iron or 

steel or a combination of both, if the cost of 

a particular domestic construction material is 

determined to be unreasonable or there is no 

domestic offer received, and the low offer is 

for foreign construction material that does 

not exceed 55 percent domestic content, the 

Contracting Officer will treat the lowest 

foreign offer of construction material that is 

manufactured in the United States and 

exceeds 55 percent domestic content as a 

domestic offer, and determine whether the 

cost of that offer is unreasonable by applying 

the evaluation factor listed in paragraph 

(b)(3)(i)(B)(1) of this clause. 

(3) The procedures in paragraph 

(b)(3)(i)(B)(2) of this clause will no longer 

apply as of January 1, 2030. 

* * * * * 

Alternate I (OCT 2022). As prescribed in 

25.1102(a)(3), substitute the following 

sentence for the first sentence in paragraph 

(1)(ii)(A) of the definition of ‘‘domestic 

construction material’’ in paragraph (a): 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds ll percent of the cost of all 

its components. [Contracting officer to insert 

the percentage.] 

■ 29. Amend section 52.225–11 by— 

■ a. Revising the date of the clause; 

■ b. Adding in alphabetical order 

definitions for ‘‘Critical component’’ 

and ‘‘Critical item’’ in paragraph (a); 

■ c. In paragraph (a), in the definition 

‘‘Domestic construction material’’ 


khammond on DSKJM1Z7X2PROD with RULES2
12798 Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Rules and Regulations 

revising the first sentence of paragraph 

(1)(ii)(A); 

■ d. Revising paragraph (b)(4)(i); and 

■ e. Adding Alternate II. 

The revisions and additions read as 

follows: 

52.225–11 Buy American—Construction 

Materials Under Trade Agreements. 

* * * * * 

Buy American—Construction Materials 

Under Trade Agreements (OCT 2022) 

(a) * * * 

Critical component means a component 

that is mined, produced, or manufactured in 

the United States and deemed critical to the 

U.S. supply chain. The list of critical 

components is at FAR 25.105. 

Critical item means a domestic 

construction material or domestic end 

product that is deemed critical to U.S. supply 

chain resiliency. The list of critical items is 

at FAR 25.105. 

* * * * * 

Domestic construction material * * * 

(1) * * * 

(ii) * * * 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds 60 percent of the cost of all 

its components, except that the percentage 

will be 65 percent for items delivered in 

calendar years 2024 through 2028 and 75 

percent for items delivered starting in 

calendar year 2029. * * * 

* * * * * 

(b) * * * 

(4) * * * 

(i) The cost of domestic construction 

material would be unreasonable. 

(A) For domestic construction material that 

is not a critical item or does not contain 

critical components. (1) The cost of a 

particular domestic construction material 

subject to the restrictions of the Buy 

American statute is unreasonable when the 

cost of such material exceeds the cost of 

foreign material by more than 20 percent; 

(2) For construction material that is not a 

COTS item and does not consist wholly or 

predominantly of iron or steel or a 

combination of both, if the cost of a 

particular domestic construction material is 

determined to be unreasonable or there is no 

domestic offer received, and the low offer is 

for foreign construction material that does 

not exceed 55 percent domestic content, the 

Contracting Officer will treat the lowest offer 

of foreign construction material that is 

manufactured in the United States and 

exceeds 55 percent domestic content as a 

domestic offer and determine whether the 

cost of that offer is unreasonable by applying 

the evaluation factor listed in paragraph 

(b)(4)(i)(A)(1) of this clause. 

(3) The procedures in paragraph 

(b)(4)(i)(A)(2) of this clause will no longer 

apply as of January 1, 2030. 

(B) For domestic construction material that 

is a critical item or contains critical 

components. (1) The cost of a particular 

domestic construction material that is a 

critical item or contains critical components, 

subject to the requirements of the Buy 

American statute, is unreasonable when the 

cost of such material exceeds the cost of 

foreign material by more than 20 percent plus 

the additional preference factor identified for 

the critical item or construction material 

containing critical components listed at FAR 

25.105. 

(2) For construction material that does not 

consist wholly or predominantly of iron or 

steel or a combination of both, if the cost of 

a particular domestic construction material is 

determined to be unreasonable or there is no 

domestic offer received, and the low offer is 

for foreign construction material that does 

not exceed 55 percent domestic content, the 

Contracting Officer will treat the lowest offer 

of foreign construction material that is 

manufactured in the United States and 

exceeds 55 percent domestic content as a 

domestic offer, and determine whether the 

cost of that offer is unreasonable by applying 

the evaluation factor listed in paragraph 

(b)(4)(i)(B)(1) of this clause. 

(3) The procedures in paragraph 

(b)(4)(i)(B)(2) of this clause will no longer 

apply as of January 1, 2030. 

* * * * * 

Alternate II (OCT 2022). As prescribed 

in 25.1102(c)(4) substitute the following 

sentence for the first sentence of 

paragraph (1)(ii)(A) of the definition of 

domestic construction material in 

paragraph (a): 

(A) The cost of its components mined, 

produced, or manufactured in the United 

States exceeds ll percent of the cost of all 

its components. [Contracting officer to insert 

the percentage.] 

[FR Doc. 2022–04173 Filed 3–4–22; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Chapter 1 

[Docket No. FAR–2022–0051, Sequence No. 

2] 

Federal Acquisition Regulation; 

Federal Acquisition Circular 2022–05; 

Small Entity Compliance Guide 

AGENCY: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Small Entity Compliance Guide 

(SECG). 

SUMMARY: This document is issued 

under the joint authority of DoD, GSA, 

and NASA. This Small Entity 

Compliance Guide has been prepared in 

accordance with section 212 of the 

Small Business Regulatory Enforcement 

Fairness Act of 1996. It consists of a 

summary of the rule appearing in 

Federal Acquisition Circular (FAC) 

2022–05, which amends the Federal 

Acquisition Regulation (FAR). 

Interested parties may obtain further 

information regarding this rule by 

referring to FAC 2022–05, which 

precedes this document. 

DATES: March 7, 2022. 

ADDRESSES: The FAC, including the 

SECG, is available at https://

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Mahruba Uddowla, Procurement 

Analyst, at 703–605–2868 or by email at 

mahruba.uddowla@gsa.gov, for 

clarification of content. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat Division at 202–501–4755 or 

GSARegSec@gsa.gov. Please cite FAC 

2022–05, FAR Case 2021–008. 

RULE LISTED IN FAC 2022–05 

Subject FAR case 

Amendments to the FAR Buy 

American Act—Requirements 2021–008 

SUPPLEMENTARY INFORMATION: A 

summary for the FAR rule follows. For 

the actual revisions and/or amendments 

made by this FAR rule, refer to the 

specific subject set forth in the 

document following this summary. FAC 

2022–05 amends the FAR as follows: 

Amendments to the FAR Buy American 

Act Requirements (FAR Case 2021–008) 

This final rule amends the Federal 

Acquisition Regulation (FAR) to 

implement section 8 of E.O. 14005, 

Ensuring the Future Is Made in All of 

America by All of America’s Workers. 

Upon the October 25, 2022, effective 

date, this final FAR rule changes the 

domestic content threshold to 60 

percent immediately, then to 65 percent 

for items delivered starting in calendar 

year 2024, and then to 75 percent for 

items delivered starting in calendar year 

2029. While a supplier that is awarded 

a contract with a period of performance 

that spans this schedule of domestic 

content threshold increases will be 

required to comply with each increased 

threshold for the items in the year of 

delivery, this rule allows for the agency 

senior procurement executive to apply 

an alternate domestic content test under 

which the contractor would be required 

to comply with the domestic content 

threshold in place at time of award for 

the entire life of the contract. 

This final rule also creates a fallback 

threshold that would allow for products 


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