Buy American Act & Domestic Procurement Preferences

The Buy American Act of 1933 requires the federal government to prefer domestically produced goods in many direct procurements. Separately, Buy America provisions in transportation law and the Build America, Buy America Act (BABA) impose domestic-content requirements on many federally funded infrastructure projects. These are related but distinct regimes. The Buy American Act is mainly implemented through FAR Part 25 for federal procurement, while BABA operates through grant and assistance rules such as 2 CFR Part 184. Together they create a layered domestic-preference framework that matters to federal contractors, infrastructure recipients, and manufacturers trying to document U.S. content correctly.

Current Law (2026)

Parameter	Value
Buy American Act	41 U.S.C. §§ 8301-8305 — applies to many direct federal procurements
Buy America (transportation)	23 U.S.C. § 313; 49 U.S.C. § 5323(j) — applies to FHWA and FTA projects
Build America, Buy America	Infrastructure Investment and Jobs Act, title IX, subtitle A — applies to many federally funded infrastructure programs
Domestic content threshold (manufactured goods, FAR Buy American)	65% of component cost for items delivered in calendar years 2024-2028; 75% beginning in 2029
Iron and steel	Special stricter rules apply for products consisting wholly or predominantly of iron or steel; BABA and transportation Buy America rules also use separate 100% domestic production concepts in many settings
Waivers	Available for public interest, nonavailability, and unreasonable cost, subject to program-specific rules
Made in America Office	White House office reviewing waiver requests; public disclosure of all waivers
Trade agreement exceptions	Trade Agreements Act and related agreements can displace Buy American preferences for covered procurements above threshold amounts
Enforcement	FAR Part 25; agency contracting officers; Made in America Office

Legal Authority

41 U.S.C. § 8302 — American materials required for public use (government agencies must acquire only unmanufactured articles, materials, and supplies that have been mined or produced in the United States, and only manufactured articles that have been manufactured in the United States substantially all from domestic materials)
41 U.S.C. § 8303 — Contracts for public works (every contract for construction, alteration, or repair of any public building or public work must include a provision requiring that all iron, steel, and manufactured goods used in the project are produced in the United States)

How It Works

Two distinct legal frameworks govern domestic sourcing in federal spending, and they apply in different contexts. The Buy American Act (BAA) governs direct federal purchases: unmanufactured goods must generally be mined or produced in the United States, and many manufactured end products must meet a domestic component-cost test under FAR Part 25 — 65% domestic components for deliveries through 2028, rising to 75% from 2029. Stricter rules apply for iron and steel products. Separately, Buy America provisions govern certain federally funded grants — particularly highway and transit programs — and commonly require that all iron and steel used in covered projects be produced in the United States. These are grant-condition rules, not procurement rules: a contractor selling office furniture directly to a federal agency faces the BAA; a contractor working on a federally funded bridge faces Buy America.

The Build America, Buy America Act (BABA, 2021) significantly expanded domestic preferences across federally funded infrastructure, extending requirements for iron, steel, manufactured products, and construction materials to a broader range of grant programs. All three frameworks allow waivers — for public interest, non-availability of domestic supply, or unreasonable cost — with thresholds that vary by statute. Under BABA, an unreasonable-cost waiver applies when domestic sourcing would raise the overall project cost by more than 25%; the Made in America Office at OMB coordinates waiver review and public posting across agencies. For procurements above applicable dollar thresholds, the Trade Agreements Act displaces Buy American preferences: if the U.S. has a qualifying free trade agreement or WTO Government Procurement Agreement commitment with the goods' country of origin, those goods may compete on equal footing with domestic products.

How It Affects You

If you're a federal contractor selling manufactured products to the government: The key compliance question is which regime applies — and whether a trade agreement exception might apply. For most manufactured end products delivered under FAR-governed contracts in calendar years 2024–2028, the domestic component cost threshold is 65% (rising to 75% in 2029 under the Biden-era FAR rule that remains in effect). The 65% test means at least 65% of the total cost of all components must come from U.S.-origin materials — not just assembled domestically, but sourced domestically. Iron and steel products face a stricter rule: they must be entirely of U.S. origin, not just 65% domestic by cost. COTS (commercially available off-the-shelf) items are generally exempt. If your contract exceeds the applicable Trade Agreements Act threshold (roughly $202,000 for supplies in 2026), qualifying-country goods may be treated as domestic — check the FAR Part 25 country-by-country list at acquisition.gov/browse/index/far and confirm with your contracting officer. Non-compliance can result in contract termination and False Claims Act exposure if you certify incorrectly. Buy American requirements also intersect with small business contracting set-asides — domestic content certification is part of the standard FAR representation package.

If you're a state, county, or transit agency spending federal infrastructure funds: The Build America, Buy America Act (BABA) — enacted as part of the Infrastructure Investment and Jobs Act (2021) — imposes stricter requirements than the direct-procurement Buy American Act, and they apply to your grants, not just direct federal purchases. For iron and steel, BABA requires 100% domestic production — not a cost threshold but a complete domestic origin rule. For manufactured products, the domestic content test is 55% by cost (lower than FAR's 65%, but covering a far broader universe of federally funded projects). For construction materials (concrete, lumber, drywall, glass, plastic, rubber), BABA requires domestic production. Waivers are available through the Made in America Office at madeinamerica.gov/waivers for nonavailability, public interest, and unreasonable cost (defined as more than a 25% increase in project cost). Your state DOT or relevant federal program office is the first point of contact for program-specific waiver procedures. Federally funded construction also triggers Davis-Bacon prevailing wage obligations — the two regimes typically apply together.

If you're a U.S. manufacturer seeking to benefit from domestic-preference procurement: The Buy American framework creates a structural pricing advantage. Foreign-manufactured end products not covered by trade agreements face a 20% price differential disadvantage in FAR Part 25 evaluation (30% for DoD contracts), meaning your product wins even if it's priced up to 20% higher than a foreign competitor. To protect and expand that advantage, document your supply chain to confirm you meet the 65% domestic component threshold (rising to 75% in 2029), track per-contract iron and steel sourcing for heavy products, and register in SAM.gov as a domestic manufacturer. The manufacturing incentives regime — including IRA §§ 45X advanced manufacturing production credits and § 48C advanced energy manufacturing credits — can fund supply chain investments that improve your domestic content ratio, making Buy American compliance and tax incentives complementary. If you're unsure whether your product qualifies, the Manufacturers Alliance (manufacturersalliance.org) and the National Association of Manufacturers (nam.org) publish compliance guides updated for the current FAR threshold schedule.

If you're a foreign manufacturer or exporter seeking access to U.S. government markets: The Buy American Act restricts your access to federal procurements unless your country participates in the WTO Government Procurement Agreement (GPA) or has a qualifying free trade agreement (FTA) with the United States. If it does, your goods are treated as domestic for covered procurements above the applicable thresholds (roughly $202,000 for supplies, $7.8 million for construction in 2026). Countries currently covered include EU member states, Japan, Canada, Mexico (under USMCA), South Korea, Singapore, Australia, and others — check the current FAR Part 25.4 qualifying-countries list at acquisition.gov. For procurements below the Trade Agreements Act threshold, or for BABA-covered infrastructure grants (which trade agreement exceptions don't reach), domestic requirements are strict regardless of your country's agreement status. If you're supplying through a U.S. prime contractor, the prime bears the compliance certification burden — but be prepared to provide documented origin certifications for your components, as prime contractors increasingly require supplier-level country-of-origin declarations to support their FAR representations.

State Variations

Buy American is federal, but many states have enacted their own preferences:

Many states have "buy local" or domestic preference laws for state procurement
State preferences typically add a percentage price preference for in-state or domestic products (commonly 5-10%)
State laws vary in scope — some cover all goods, others focus on specific categories (steel, food, textiles)
Buy America requirements flow to states through federal grant conditions

Some states have been more aggressive than the federal government in domestic content requirements

Implementing Regulations

48 CFR Part 25 — FAR Foreign Acquisition — the primary implementing regulation for the Buy American Act in federal contracting. Key subparts:
- Subpart 25.1 — Buy American Supplies (7 sections): agencies must purchase domestic end products unless an exception applies; a manufactured end product is "domestic" if it is manufactured in the U.S. and its components meet the domestic content threshold — 55% domestic content for most items; the threshold rises to 65% for deliveries in 2024–2028 and 75% for deliveries from 2029 for many manufactured products; unmanufactured commodities (minerals, raw materials) must be mined or produced in the U.S. to qualify; waiver categories include: nonavailability, unreasonable cost (price differential test), public interest, and Trade Agreements Act-covered acquisitions
- Subpart 25.2 — Buy American Construction Materials (7 sections): federal construction contracts must use domestic construction materials — iron, steel, manufactured products incorporated into a public building or public work; same exceptions as Subpart 25.1; the construction materials standard applies to materials incorporated into the project, not to temporary construction aids (scaffolding, tools)
- Subpart 25.4 — Trade Agreements (9 sections): for acquisitions above thresholds (approximately $174,000 for supplies, $6.7 million for construction as of 2024), products from WTO GPA signatory countries and FTA partner nations (Canada, Mexico, EU members, Japan, Korea, Australia, and others) are treated as domestic; USMCA provides enhanced North American preferences; trade agreement coverage is determined by solicitation NAICS code and contract value at time of award
- Subpart 25.5 — Evaluating Foreign Offers (8 sections): when a foreign offer competes against a domestic offer and no trade agreement applies, contracting officers add a 6% price evaluation factor to the foreign offer (12% if the foreign offeror would be a large business under the applicable size standard); if the adjusted foreign price still undercuts the domestic offer, the contracting officer may award to the foreign source but documents the decision; the domestic preference applies even when the foreign product is cheaper after adjustment
- Subpart 25.6 — ARRA Buy American Construction Materials (10 sections): the American Recovery and Reinvestment Act (2009) imposed a stricter Buy American requirement — 100% U.S.-produced iron and steel for construction projects funded by ARRA; the ARRA standard remains in effect for any ARRA-funded work; no domestic content threshold — if the iron or steel is not American-made, it does not qualify regardless of the value share. The grant-side implementation of ARRA Buy American (for assistance agreements, not contracts) is governed by 2 CFR Part 176.
- Subpart 25.7 — Prohibited Sources (12 sections): regardless of price or quality, agencies are prohibited from acquiring goods and services from entities in sanctioned countries (North Korea, Iran, Cuba) or from companies determined to be Chinese military companies; specialized restrictions apply to certain telecommunications and video surveillance equipment from companies including Huawei, ZTE, Hikvision, and Dahua (as listed in NDAA § 889); FAR 52.204-25 implements the § 889 prohibition and must be included in all solicitations
2 CFR Part 184 — Buy America preferences for infrastructure programs (Build America, Buy America Act requirements for federally funded infrastructure)

Pending Legislation (119th Congress)

As of April 8, 2026, no enacted federal law has displaced the core Buy American / Buy America / BABA framework summarized above. The main live issues for this page are regulatory implementation, waiver policy, trade-agreement interaction, and program-specific compliance guidance rather than a single new statute replacing existing domestic-preference law.

Recent Developments

The FAR domestic-content schedule adopted after the 2021 Buy American rulemaking remains central to current procurement compliance: 65% applies to many manufactured end products delivered in calendar years 2024-2028, with 75% scheduled for 2029.

2026 FAR status: Acquisition.gov's current FAR text continues to reflect the 65% domestic content threshold for many manufactured end products delivered in calendar years 2024-2028, with 75% beginning in 2029.
BABA waiver framework remains active: OMB and the Made in America Office continue to oversee waiver publication and review for BABA-covered infrastructure programs, using the familiar public-interest, nonavailability, and unreasonable-cost waiver categories.
March 13, 2026: A White House executive order on truthful “Made in America” advertising directed stronger verification and enforcement of American-origin claims in government-wide acquisition settings, reinforcing compliance scrutiny even though it did not rewrite the underlying Buy American statutes.