resources · referenceBuy American Act domestic content thresholds
The percentage of a product's components that must be domestic to qualify under the Buy American Act, how that threshold rises through 2029, and what counts differently for COTS items.
FAR 52.225-1 requires a manufactured end product sold to the federal government to be a domestic end product to receive Buy American Act preference. As of calendar year 2026, that means the cost of the product's components mined, produced, or manufactured in the United States must exceed 65 percent of the cost of all its components. That threshold rises to 75 percent for items delivered starting January 1, 2029, under the schedule the FAR Council set in its March 2022 final rule, 87 FR 12780.
The threshold, by calendar year
| Delivery period | Domestic content threshold |
|---|---|
| Before October 25, 2022 (pre-2022 rule baseline) | 55% |
| October 25, 2022 through calendar year 2023 | 60% |
| Calendar years 2024 through 2028 | 65% |
| Calendar year 2029 onward | 75% |
Iron and steel end products
A separate, lower test applies to end products that consist wholly or predominantly of iron or steel: those qualify as domestic when the cost of foreign iron and steel is less than 5 percent of the cost of all components — not the same percentage test used for every other product category.
How the test works
The threshold is a cost-of-components test, not a count of parts or a weight measurement.
- Component
- An article, material, or supply incorporated directly into an end product.
- Cost of components
- For a purchased component, its acquisition cost — including transportation to the place of incorporation into the end product and any applicable duty (whether or not a duty-free entry certificate is issued). For a component the manufacturer produces itself, all costs associated with manufacturing the component, including transportation, plus allocable overhead costs.
- Domestic end product
- An end product manufactured in the United States, where the cost of components mined, produced, or manufactured domestically exceeds the calendar year's applicable percentage threshold of the cost of all components.
The step history: 55% to 75%
Before the FAR Council's 2022 final rule, the Buy American Act's domestic content threshold had sat at 55 percent. The 2022 rule set out a staged increase instead of a single jump: 60 percent effective with the rule itself (October 25, 2022), 65 percent for items delivered in calendar years 2024 through 2028, and 75 percent for items delivered starting calendar year 2029. The rule gives contractors a multi-year runway to requalify supply chains against each higher threshold before it takes effect, rather than a single cutover date.
Commercially available off-the-shelf (COTS) items
FAR 25.101(a)(2) waives the domestic content test entirely for COTS items — items sold in substantial quantities in the commercial marketplace and offered to the government without modification, in the same form they are sold commercially. That waiver has one exception: it does not extend to COTS items that consist wholly or predominantly of iron or steel — with a further exception to the exception for COTS fasteners, which stay waived even when made wholly or predominantly of iron or steel.
The fallback threshold
Because the threshold now climbs to 75 percent by 2029, the 2022 rule built in a release valve: a fallback threshold of 55 percent domestic content. A non-iron/steel, non-COTS end product or construction material that clears 55 percent — but not the calendar year's higher threshold — can still be evaluated as a domestic offer when either no product meets the higher threshold, or a product that does meet it is priced unreasonably. The fallback threshold is scheduled to expire January 1, 2030, one year after the 75 percent threshold takes full effect.
What counts as a domestic end product under the Buy American Act?
A manufactured end product qualifies as a domestic end product if it's manufactured in the United States and the cost of its components mined, produced, or manufactured in the United States exceeds the applicable threshold — 65 percent for items delivered in calendar years 2024 through 2028. A separate test applies to products that consist wholly or predominantly of iron or steel: foreign iron and steel must total less than 5 percent of the cost of all components.
What changes on January 1, 2029?
The domestic content threshold steps up from 65 percent to 75 percent for items delivered starting in calendar year 2029, under the schedule FAR Subpart 25.1 set out in the FAR Council's March 2022 final rule (87 FR 12780).
Do commercially available off-the-shelf (COTS) items have to meet the threshold?
No — FAR 25.101(a)(2) waives the domestic content test for COTS items, with one carve-out: the waiver doesn't extend to COTS items that consist wholly or predominantly of iron or steel, except for COTS fasteners, which remain waived even then.
What happens if no product meets the threshold, or the qualifying product's price is unreasonable?
A fallback threshold of 55 percent domestic content can qualify a non-iron/steel, non-COTS end product or construction material as domestic when no product meets the higher threshold, or when a qualifying product's price is unreasonable. The fallback is scheduled to expire January 1, 2030.