T he Buy American Act of 1933 is the earliest and arguably the best known of the various statutes regarding federal procurement of domestic products. Essentially, the act attempts to protect domestic businesses and labor by establishing a price preference for domestic end products and construction materials in government acquisitions. The act is of perennial interest to Congress, which has periodically enacted or considered measures to expand the scope of domestic preferences in federal procurements or, more rarely, to narrow it. The act itself has seldom been amended. However, numerous statutory requirements like those of the Buy American Act have been enacted. See generally CRS Report R43354, Domestic Content Restrictions: The Buy American Act and Complementary Provisions of Federal Law , by [author name scrubbed] et al. This report supersedes CRS Report 97-765, The Buy American Act: Requiring Government Procurements to Come from Domestic Sources , by [author name scrubbed]. On its face, the Buy American Act appears to prohibit the acquisition of foreign goods by federal agencies by providing that [o]nly unmanufactured articles, materials, and supplies that have been mined or produced in the United States, and only manufactured articles, materials, and supplies that have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States, shall be purchased for public use. As implemented, however, the act is better understood as generally establishing a price preference for domestic end products and construction materials. Specifically, the provisions of the Federal Acquisition Regulation (FAR) implementing the Buy American Act require that, when a domestic offer (i.e., an offer of a domestic end product) is not the low offer, the procuring agency must add a certain percentage of the low offer's price (inclusive of duty) to that offer before determining which offer is the lowest priced or "best value" for the government. This percentage typically ranges from 6%, in cases where the lowest domestic offer is from a large business; to 12%, when the lowest domestic offer is from a small business; to 50%, for Department of Defense procurements, although agencies may adopt higher percentages by regulation. If the domestic offer is the lowest, or tied for lowest, after the application of this price preference, the agency must award the contract to the domestic offeror. However, if the foreign offer still has the lowest price, the agency generally awards the contract to the foreign offeror pursuant to provisions of the Buy American Act permitting the purchase of foreign end products (and the use of foreign construction materials) when the costs of domestic ones are "unreasonable." Determining the act's applicability to specific procurements—and, particularly, determining whether the act's requirements were violated in particular cases—can raise complicated legal and factual questions. Much depends upon how particular terms (e.g., end product, component) are defined and construed for purposes of the Buy American Act. However, the details of manufacturing processes are often also relevant. Acquisitions of services are generally not subject to the Buy American Act. Nor does the act restrict purchases from foreign persons so long as their products are mined, produced, or manufactured in the United States, as required by the act. Under the act, federal agencies procuring goods for use in the United States under a contract valued in excess of the micro-purchase threshold (typically $3,500) may generally purchase foreign (i.e., non-domestic) end products only in exceptional circumstances. The FAR's definition of end product appears straightforward on its face: " End product means those articles, materials, and supplies to be acquired for public use." However, determining whether an item is an end product, or a component of an end product, can be complicated, particularly when the agency seeks to acquire some sort of "system," and judicial and other tribunals often look to the purpose of the procurement in making such determinations. The term domestic end product , in turn, includes unmanufactured end products mined or produced in the United States. The term also encompasses end products manufactured in the United States, provided that (1) the cost of the components mined, produced, or manufactured in the United States exceeds 50% of the cost of all components, or (2) the end product is a commercially available off-the-shelf (COTS) item. Manufacture is not defined by the Buy American Act, the executive orders implementing the act, or the FAR, and determining whether particular activities constitute "manufacturing"—such that a product can be said to be manufactured in the United States—can be complicated. In answering this question, judicial and other tribunals have, at various times, considered whether there were "substantial changes in physical character"; whether separate manufacturing stages were involved, or whether there was one continuous process; and whether the article is completed in the form required by the government. Operations performed after the item has been completed (e.g., packaging, testing) generally are not viewed as manufacturing. A component is any "article, material, or supply incorporated directly into an end product or construction material." However, distinguishing between components and end products can be difficult, as previously noted. In addition, it is important to note that components could potentially be deemed to be mined, produced, or manufactured in the United States, regardless of their actual place of origin, if (1) the end product in which they are incorporated is manufactured in the United States, and (2) the components are of a class or kind determined by the government not to be mined, produced, or manufactured in the United States in "sufficient and reasonably available commercial quantities of a satisfactory quality," as discussed below. The costs of components are generally determined based upon certain costs incurred by the contractor in purchasing or manufacturing the components. Specifically, for components purchased by the contractor, the cost of components includes the acquisition costs (including transportation costs to the place of incorporation into the end product or construction material), and any applicable duty (regardless of whether a duty-free certificate of entry is issued); and for components manufactured by the contractor, the cost of components includes all costs associated with the manufacture of the component (including transportation, as discussed above), and allocable overhead costs, but excluding profits and any costs associated with the manufacture of the end product. Commercially available off-the-shelf (COTS) items generally include any item of supply (including construction material) that is (1) a "commercial item," as discussed below; (2) sold in substantial quantities in the commercial marketplace; and (3) offered to the government without modification, in the same form in which it is sold in the commercial marketplace. The Buy American Act similarly bars agencies from using nondomestic construction materials absent exceptional circumstances. Construction material generally encompasses any "article, material, or supply brought to the construction site by a contractor or subcontractor for incorporation into [a] building or work," including items brought to the site preassembled from articles, materials, or supplies. However, materials purchased directly by the government are supplies, not construction materials. Domestic construction material , in turn, includes unmanufactured construction materials mined or produced in the United States, as well as construction material manufactured in the United States, provided that (1) the cost of the components mined, produced, or manufactured in the United States exceeds 50% of the cost of all components, or (2) the construction material is a COTS item. Other key terms, including manufacture , components , and COTS , are defined in the same way for construction materials as for end products. The costs of construction materials are also generally calculated in the same way as the costs of end products. The FAR lists five "exceptions" to the Buy American Act, or five circumstances in which an agency may purchase foreign end products or use foreign construction materials without violating the act. These exceptions apply when (1) the procurement of domestic goods or the use of domestic construction materials would be inconsistent with the public interest; (2) domestic end products or construction materials are unavailable; (3) the contracting officer determines that the costs of domestic end products or construction materials would be unreasonable; (4) the agency is procuring information technology that is a commercial item; or (5) the goods are acquired specifically for commissary resale. However, some commentators also view the requirements that purchases be above the micro-purchase threshold, and for use in the United States, as exceptions to the Buy American Act. The procuring agency may determine, on its own initiative, whether one of these exceptions applies. Alternatively, particularly in the case of construction contracts, vendors may request that the contracting officer make a determination regarding the applicability of an exception prior to or after contract award. Contractors are, however, generally not entitled to a determination that an exception applies. The Buy American Act and its implementing regulations expressly authorize agencies to purchase foreign end products and use foreign construction materials if the head of the contracting agency determines that application of the act's restrictions would be "impracticable" or "inconsistent with the public interest." The "public interest" prong of this exception encompasses agency agreements with foreign governments that provide for the purchase of foreign end products or construction materials, as well as ad hoc determinations that application of the act's restrictions would not be in the public interest. Such determinations are typically seen as entrusted to agency discretion, and generally will not be reviewed by judicial or other tribunals. The act and its implementing regulations also permit agencies to purchase foreign end products and use foreign construction materials when the relevant articles, materials, or supplies are not mined, produced, or manufactured in the United States "in sufficient and reasonably available commercial quantities and of a satisfactory quality." In some cases, the government has made a determination that particular classes of products are nonavailable.