Last updated: October 2026 · Sources: Acquisition.gov (FAR Part 25), Federal Register
Short answer: The Buy American Act (BAA) applies to federal purchases of supplies for use in the U.S. once a contract exceeds the micro-purchase threshold, which has been $15,000 since October 1, 2025. To count as domestic, a product must be made in the U.S., and its domestic components must exceed 65% of the cost of all components for deliveries through 2028, rising to 75% from 2029.
Buy American Act vs. Buy America: what’s the difference?
| Buy American Act (BAA) | Buy America / BABA | |
|---|---|---|
| Applies to | The federal government’s own purchases of supplies and construction materials | Infrastructure and transit projects paid for with federal grants and other financial assistance |
| Who must comply | Federal contractors | States, cities and other grant recipients, and their contractors |
| Main rule | FAR Part 25 | Grant program rules and the Build America, Buy America Act (2021) |
Misconception 1: “Buy American and Buy America are the same law”
They aren’t. The Buy American Act, passed in 1933, governs what the federal government itself buys. “Buy America” rules, including the Build America, Buy America Act, govern projects that states, cities and other recipients pay for with federal funds, such as roads, bridges and transit. A company can be subject to one, both or neither, depending on who is buying and with what money.
Misconception 2: “Foreign products are never allowed”
Foreign products can be bought in several situations. These are the Buy American Act exceptions:
- Trade agreements. For acquisitions covered by the WTO Government Procurement Agreement, the supply threshold is $174,000 for 2026–2027 (FAR 25.402). Above it, the Trade Agreements Act (TAA) waives the BAA for products from designated countries. GSA Schedule contracts include the TAA clause, so every product on a Schedule must be made or substantially transformed in the U.S. or a TAA designated country.
- Statutory exceptions (FAR 25.103): public interest, non-availability, unreasonable cost of the domestic product, items for resale, and information technology that is a commercial product.
Misconception 3: “Small contracts and small businesses are exempt”
Only purchases at or below the micro-purchase threshold ($15,000 since October 1, 2025) fall outside the BAA. Above that, the rules apply, including to contracts set aside for small businesses (FAR 25.100).
Misconception 4: “Every component has to be made in the U.S.”
No. A domestic end product must be manufactured in the U.S., and the cost of its domestic components must exceed a set share of the cost of all its components (FAR 25.101):
| Year the item is delivered | Domestic component threshold |
|---|---|
| 2022–2023 | More than 60% |
| 2024–2028 | More than 65% |
| 2029 and later | More than 75% |
For commercially available off-the-shelf (COTS) items, the component test is waived: they must be manufactured in the U.S., but the domestic content percentage doesn’t apply. Products made predominantly of iron or steel are the exception, because they face a stricter test on their iron and steel content.
Misconception 5: “Once you’re compliant, you stay compliant”
The threshold depends on the year each item is delivered, not the year the contract was signed. A five-year contract awarded in 2027 must meet 65% at first and 75% for items delivered from 2029. Changing a supplier or a component can also change your percentage, so keep component cost and origin records current for the life of the contract.
Which clauses put the Buy American Act in my contract?
For supply contracts, look for the Buy American clause, FAR 52.225-1 (Buy American—Supplies). When you submit an offer, you certify which of your products are domestic through the Buy American Certificate, FAR 52.225-2, or through the equivalent representation in your SAM.gov registration. Contracts covered by trade agreements use the Trade Agreements clause, FAR 52.225-5, instead.
How to stay compliant
- List every component of each product, with its cost and country of origin.
- Calculate your domestic component percentage against the threshold for the delivery year.
- Get written origin certifications from your suppliers, and update them when suppliers change.
- For GSA Schedule products, also confirm TAA compliance for every item on your price list.
Frequently asked questions
What does the Buy American Act apply to?
It applies to supplies and construction materials the federal government buys for use in the United States, once a supply contract exceeds the micro-purchase threshold ($15,000). It does not apply to grant-funded projects, which follow Buy America rules instead.
Are there Buy American Act countries?
No. The Buy American Act itself only distinguishes U.S. products from foreign ones. The list of countries whose products can be bought instead comes from the Trade Agreements Act. See the TAA designated countries list.
What is the Buy American Act threshold in 2026?
The BAA applies to supply contracts above the micro-purchase threshold, which has been $15,000 since October 1, 2025. Domestic components must exceed 65% of the cost of all components for items delivered from 2024 through 2028.
Does the Buy American Act apply to GSA Schedule contracts?
GSA Schedule contracts include the Trade Agreements Act clause, which waives the BAA for products from TAA designated countries. In practice, every product on a GSA Schedule must come from the U.S. or a designated country.
Are COTS items exempt from the Buy American Act?
COTS items are exempt from the domestic component test, but they still must be manufactured in the U.S. to count as domestic. Items made predominantly of iron or steel are not covered by that waiver.
Is the Buy American Act the same as Buy America?
No. The Buy American Act covers the federal government’s own purchases. Buy America rules cover infrastructure and transit projects paid for with federal grants.
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