Contract Policy - International Agreements, Exceptions and Waivers

The Buy American statute requires federal agencies to apply a price preference for domestic end products for contracts performed in the United States. Exceptions that DoD uses are as follows:

• Nonavailability: The Buy American statute does not apply when end products or components to be acquired are not mined or produced in the U.S. in sufficient and reasonably available commercial quantities, and of a satisfactory quality;
• When the contracting officer determines the cost of a domestic end product would be unreasonable;
• When an agency head determines that applying a domestic preference would be inconsistent with the public interest (e.g., invoking a RDP agreement with a foreign government that provides and exception to the Buy American statute);
• The acquisition of information technology that is a commercial item; and
• Foreign end products purchased specifically for commissary resale.

The Buy American statute does not apply to procurement below the micro-purchase threshold, or if the product will be used outside of the United States.

 

In addition, some of the restrictions may be waived pursuant to the Trade Agreements Act of 1979. Subject to the thresholds at Federal Acquisition Regulation (FAR) 25.402 and applicability at Defense Federal Acquisition Regulation Supplement (DFARS) 225.401-70, end products imported from a country that has a trade agreement with the United States are treated as domestic products. This includes countries that have signed the World Trade Organization (WTO) Agreement on Government Procurement (GPA), are signatories to the United States-Mexico-Canada Agreement or Free Trade Agreement, or have otherwise been designated by the President.

 

Further, for DoD, the The Buy American statute is waived in cases where DoD has a bilateral RDP agreement with a qualifying country. In these cases, the Secretary of Defense has signed a blanket public interest waiver applicable to 28 countries (DFARS 225.003, Definitions).

 

Summary of Buy American Statute Exceptions and Waivers

 

Exceptions	Does not apply	Waivers
Nonavailability Domestic price/cost is unreasonable Inconsistent with public interest Information technology that is a commercial item Commissary resale	Below the micro-purchase threshold Will be used outside of the United States and certain territories	World Trade Organization—Government Procurement Agreement (WTO GPA) Free Trade Agreements RDP Agreements