FAR Part 25

Question 1

Part 25

Answer 1

Foreign Acquisition

Question 2

FAR Part 25: Foreign Acquisition

Overview of FAR Part 25 - Foreign Acquisition

Purpose: Establishes policies and procedures for acquiring supplies and services from

Key Sections:

Answer 2

25.1 Buy American Act—Supplies

25.2 Buy American Act—Construction Materials

25.3 Contracts Performed Outside the United States

25.4 Trade Agreements

25.5 Evaluating Foreign Offers—Supply Contracts

25.6 American Recovery and Reinvestment Act—Buy American Statute—Construction Materials

25.7 Prohibited Sources

25.8 Other International Agreements and Coordination

25.9 Customs and Duties

25.10 Additional Foreign Acquisition Regulations

25.11 Solicitation Provisions and Contract Clauses

Question 3

FAR Part 25: Foreign Acquisition

Subpart 25.1 - Buy American Act—Supplies and 25.2 - Buy American Act—Construction Materials

Purpose: Ensures the preference for American-made supplies and construction materials (FAR 25.101, FAR 25.201).

Key Features:

Answer 3

Requirements for purchasing American-made supplies (FAR 25.101).

Criteria for using American-made construction materials (FAR 25.201).

Question 4

FAR Part 25: Foreign Acquisition

Subpart 25.3 - Contracts Performed Outside the United States and 25.4 - Trade Agreements

Purpose: Addresses contracts performed outside the U.S. and the impact of trade agreements (FAR 25.301, FAR 25.401).

Key Features:

Answer 4

Guidelines for contracts performed outside the United States (FAR 25.301).

Impact of trade agreements on procurement policies (FAR 25.401).

Question 5

FAR Part 25: Foreign Acquisition

Subpart 25.5 - Evaluating Foreign Offers—Supply Contracts and 25.6 - American Recovery and Reinvestment Act—Buy American Statute—Construction Materials

Purpose: Establishes procedures for evaluating foreign offers and specific Buy American requirements under the Recovery Act (FAR 25.501, FAR 25.601).

Key Features:

Answer 5

Criteria for evaluating foreign offers in supply contracts (FAR 25.501).

Additional Buy American requirements for construction materials under the Recovery Act (FAR 25.601).

Question 6

FAR Part 25: Foreign Acquisition

Subpart 25.7 - Prohibited Sources and 25.8 - Other International Agreements and Coordination

Purpose: Identifies prohibited sources and addresses other international agreements (FAR 25.701, FAR 25.801).

Key Features

Answer 6

List of prohibited sources and associated restrictions (FAR 25.701).

Guidelines for coordinating with international agreements (FAR 25.801).

Question 7

FAR Part 25: Foreign Acquisition

Subpart 25.9 - Customs and Duties and 25.10 - Additional Foreign Acquisition Regulations

Purpose: Provides guidance on customs and duties and additional foreign acquisition regulations (FAR 25.901, FAR 25.1001).

Key Features:

Answer 7

Procedures for handling customs and duties for foreign acquisitions (FAR
25.901).

Additional regulations governing foreign acquisitions (FAR 25.1001).

Question 8

FAR Part 25: Foreign Acquisition

Subpart 25.11 - Solicitation Provisions and Contract Clauses

Purpose: Establishes solicitation provisions and contract clauses for
foreign acquisitions (FAR 25.1101).

Key Features:

Answer 8

Required solicitation provisions for foreign acquisitions (FAR 25.1101).

Standard contract clauses to ensure compliance with foreign acquisition policies (FAR 25.1102).

Question 9

FAR Part 25: Foreign Acquisition

Summary of FAR Part 25 - Impact on Wealth Distribution

Purpose: Highlights the impact of FAR Part 25 on wealth distribution.

Key Takeaways:

Answer 9

Promotes the use of American-made products to support domestic industries.

Ensures fair evaluation of foreign offers and compliance with international agreements.

Addresses prohibited sources to protect national interests

Question 10

What Is the Buy American Statute?

Answer 10

The Buy American statute restricts the purchase of supplies, that are not domestic end products, for use within the United States.

Question 11

Domestic End Product

Answer 11

An unmanufactured end product mined or produced in
the United States

An unmanufactured end product mined, if the cost of its components, mined, produced or manufactured in the United States exceeds the percentage of the cost of all its components as stated in the FAR, or the end product is a COTS item

Question 12

A foreign end product may be purchased fi

Answer 12

the contracting officer determines that the price of the lowest domestic offer is unreasonable or
fi another exception applies.

Question 13

Buy American Construction

Answer 13

The Buy American statute requires that only domestic construction materials be used in construction contracts
performed in the United States. Exceptions to the act are found at FAR 25.202.

The contracting officer must review allegations of Buy American statute violations and when necessary, take appropriate action such as process a determination concerning the inapplicability of the Buy American statute in accordance with 25.205.

Question 14

The trade agreements waive the applicability of the Buy American statute

Answer 14

for some foreign supplies and construction materials from certain countries.

When the restrictions of the
Buy American statute are waived for eligible products, eligible offers of those products receive equal consideration with domestic offers.

Question 15

The Trade Agreements Act of 1979 is an Act of Congress that governs trade agreements negotiated between the United States and other countries under the Trade Act of 1974.

The stated purposes of the TAA are to:

Answer 15

Approve and implement the trade agreements negotiated under the Trade Act of 1974

Foster the growth and maintenance of an open world trading system *

Expand opportunities for the commerce of the United States in
international trade, and

Improve the rules of international trade and to provide for the
enforcement of such rules, and for other purposes.

Question 16

Contracting officers must determine whether solicitations or contracts entered into or performed outside the United States wil require

Answer 16

offers to be submitted in U.S. currency or a specified foreign currency unless a specific currency is required by the Trade Agreements Act or an international agreement.

Question 17

Prohibited Sources

Answer 17

Except as authorized by OFAC, agencies and their contractors and subcontractors must not acquire any supplies or services fi any proclamation, Executive Order, or statute administered by OFAC would prohibit such a transaction by a person subject to the jurisdiction of the United States.

Examples
Cuba
Sudan
Iran
North Korea

Question 18

Prohibited Sources

Answer 18

Entities and individuals subject to economic sanctions are included in OFAC’s List of Specially Designated Nationals and Blocked Persons at

http://www.treas.gov/offices/enforcement/ofac/sdn

Question 19

FAR PART 25. FOREIGN
ACQUISITION

Answer 19

This part provides policies and procedures for the acquisition of foreign supplies, services, and construction materials and contracts performed outside the United States.

It also implements the Buy American statute (formerly Buy American Act), trade agreements, and other laws and regulations.

Question 20

A. BUY AMERICAN STATUTE (BUY AMERICAN ACT-SUPPLIES) (FAR 25.1)

The Buy American statute restricts the purchase of supplies that are

Answer 20

not domestic end products. The FAR defines a domestic end product based on where it was manufactured and where the components were sourced, including specific thresholds for all supplies and special thresholds for steel and iron.

A foreign end product may be purchased if an exception applies. These include when the purchase is determined to be in the public interest, products are offered for resale, nonavailability of items items not mined, produced, or manufactured in the U.S., in sufficientquantity, or of a satisfactory quality), or if the price is determined to be unreasonable using a formula detailed in FAR 25.105.

Question 21

B. BUY AMERICAN STATUTE (BUY AMERICAN ACT-CONSTRUCTION
MATERIALS) (FAR 25.2)

The Buy American statute requires that only domestic construction materials be used

Answer 21

in construction
contracts performed in the United States.

Exceptions to the act are found at FAR 25.202.

The contracting officer must review allegations of Buy American statute violations and when necessary, take appropriate action such as processing a determination concerning the inapplicability of the Buy American statute in accordance with FAR 25.205; consider requiring the removal and replacement of the unauthorized foreign construction material; or determine in writing that the material need not be removed because it would be detrimental to the interests of the government. If the noncompliance is sufficiently serious, consider exercising appropriate contractual remedies, such as terminating the contract for default or forwarding a report to the agency suspension or debarring official.

Question 22

C. TRADE AGREEMENTS (FAR 25.4)

The trade agreements waive the applicability of the Buy American statute for some foreign supplies and construction materials from certain countries.

Answer 22

Free Trade Agreements and the World Trade Organization (WTO) Government Procurement Agreement specify procurement procedures designed to ensure fairness.

The value of the acquisition is a determining factor in the applicability of the trade agreements.

When the restrictions of the Buy American statute are waived for eligible products, offers of those products (eligible offers) receive equal consideration with domestic offers.

Under the Trade Agreements Act, only United States-made end products or eligible products may be acquired (also see FAR 25.403(c)). FAR 25.402 lists the applicablethresholds. See subpart 25.5 for evaluation procedures for supply contracts subject to trade agreements. The dollar thresholds are subject to revision every two years.