The Federal Acquisition Regulatory (FAR) Council's multi-phase Buy American Act (BAA) domestic content increase reached its final threshold in January 2026, requiring that manufactured end products delivered on federal contracts contain at least 75% U.S.-origin components by cost. The threshold applies to all FAR Part 25 covered acquisitions above the simplified acquisition threshold, per the FAR and Federal Register.
Phase-in history
- Pre-2022: 55% domestic content required
- 2022: Raised to 65% under the Made in America Executive Order implementation rule
- January 2026: Final phase raises threshold to 75%
- Iron and steel: 95% threshold remains unchanged
What "domestic content by cost" means
The 75% test applies to the cost of components, not the cost of labor or overhead. A product assembled in the U.S. from mostly foreign components can still fail the test even if it's labeled "Made in USA." Contractors must:
- Calculate the U.S.-origin component cost as a percentage of total component cost
- Maintain documentation of component origin from their supplier chain
- Update supplier representations annually — a supplier's origin claims can change
Waivers and exceptions
- Non-availability waivers: If a domestic product doesn't exist or is unreasonably priced (generally more than 20% premium), an agency can waive BAA for that item
- Trade Agreement Act (TAA) exceptions apply to acquisitions above ~$183K (the current WTO threshold) — products from TAA-designated countries are treated as domestic
- Commercial items exception: Certain commercial items are exempt — verify your product's classification