Four domestic-content tests can change a material price: component cost, iron and steel, predominant content, and the price test.
Key takeaways for domestic content tests before pricing a material
- Component cost test: The cost of components mined, produced, or manufactured in the United States must exceed 60 percent of the cost of all components, rising to 65 percent for items delivered in calendar years 2024 through 2028 and 75 percent for items delivered starting in calendar year 2029, according to Acquisition.gov.
- Foreign iron and steel limit: For construction material consisting wholly or predominantly of iron or steel, the cost of foreign iron and steel must constitute less than 5 percent of the cost of all components used in the material, according to Acquisition.gov.
- Price reasonableness: A domestic construction material is unreasonable when its cost exceeds the cost of foreign material by more than 20 percent, according to Acquisition.gov.
- Supplies distinction: The 20 percent and 30 percent end-product offer lines apply to supplies, not construction material, according to Acquisition.gov.
Which domestic-content test can change a material price
An estimator must identify which delivery year applies to the specific material before applying the correct percentage to the total cost of all components. Buy American-Construction Materials is the clause title, not the name of the component-cost test. Do not apply the 60 percent figure to a material delivered in 2029 without checking the page for the updated 75 percent requirement. Match the material's delivery date to the year range printed on the contract page. If the page does not print a specific percentage for the delivery year, write unknown rather than borrowing a figure from a different clause. This step ensures the price reflects the exact test governing that contract.
The component, iron, and predominant tests
The first test looks at the cost of components.
The second test applies when the material consists wholly or predominantly of iron or steel. In that case, the material must be manufactured in the United States, and the cost of foreign iron and steel must constitute less than 5 percent of the cost of all components used in such construction material, according to Acquisition.gov.
To determine if a material is "predominantly" iron or steel, the clause defines the term. Predominantly of iron or steel or a combination of both means that the cost of the iron and steel content exceeds 50 percent of the total cost of all its components, according to Acquisition.gov.
The clause also defines what counts as steel for these calculations. Steel means an alloy that includes at least 50 percent iron, between 0.02 and 2 percent carbon, and may include other elements, according to Acquisition.gov.
When pricing a material, check which of these three tests the contract page prints. If the page specifies a delivery year, use the matching component-cost percentage. If the material is mostly iron or steel, check the foreign iron and steel limit. Write the specific line name and the figure from the page into your estimate notes.
See the construction material cost line.
The price test and the manufactured-product fallback
The 52.225-9 Buy American-Construction Materials clause defines a cost as unreasonable when the cost of a particular domestic construction material exceeds the cost of foreign material by more than 20 percent, according to Acquisition.gov. This 20 percent threshold applies specifically to materials subject to the Buy American statute. If the domestic price is within this limit, the material passes the price test under this clause.
For construction material that does not consist wholly or predominantly of iron or steel, the clause provides a fallback mechanism. If the cost of a particular domestic construction material is determined to be unreasonable or there is no domestic offer received, and the low offer is for foreign construction material that does not exceed 55 percent domestic content, the Contracting Officer will treat the lowest foreign offer of construction material that is manufactured in the United States and exceeds 55 percent domestic content as a domestic offer, according to Acquisition.gov. The Contracting Officer then determines whether the cost of that offer is unreasonable by applying the evaluation factor listed in paragraph (b)(3)(i)(B)(1) of this clause. This 55 percent line is a specific condition within the construction-materials clause for non-iron or steel materials, not a general rule for all items.
A separate 55 percent figure appears in the uniform guidance for manufactured products. In determining whether the cost of components for manufactured products is greater than 55 percent of the total cost of all components, specific instructions apply, according to Legal Information Institute. This 2 CFR § 184.5 provision is the manufactured-products test in the uniform guidance. It is not the construction-materials clause. Do not borrow the 55 percent figure from this manufactured-products rule and apply it to a construction material on a public job. The construction-materials clause has its own specific 55 percent condition for non-iron or steel materials, as detailed above.
When pricing a material, identify which clause governs the contract. If the contract uses the 52.225-9 Buy American-Construction Materials clause, check the 20 percent price test first. If the material is non-iron or steel and the domestic price is unreasonable or absent, check the 55 percent domestic content condition for the foreign offer. If the contract involves manufactured products under the uniform guidance, the 55 percent component cost test from 2 CFR § 184.5 applies instead. Keep these rules distinct. The 20 percent and 30 percent end-product lines are supplies, not construction materials. The 55 percent manufactured-product line is a different rule. Do not mix them.
What Ohio and the highway page print instead
The Federal Highway Administration page for the Buy America - Construction Program Guide - Contract Administration - Construction - Federal Highway Administration prints specific waiver limits for non-compliant products. According to Federal Highway Administration, the total value of the non-compliant products is no more than the lesser of $1,000,000 or 5% of total applicable costs for the project. The same page states that the total amount of Federal financial assistance applied to the project, through awards or subawards, is below $500,000. These figures define the ceiling for waivers on that specific federal program guide.
The highway page also addresses electric vehicle chargers. According to Federal Highway Administration, FHWA is specifically seeking comment on whether it should modify the waiver to increase the cost threshold of components manufactured in the United States for EV Chargers used in Federal-aid highway projects from 55 percent to up to 100 percent of the cost of all components. This sentence is a request for comment and does not set a final rule that the threshold is 100 percent. Do not treat the 55 percent figure as a final construction-material test for other items; it applies specifically to the EV Charger waiver discussion in that context.
Ohio laws print a different requirement for steel products. According to Ohio Laws, whenever any building or structure, including highway improvements, in whole or in part supported by state capital funds, is to be erected or constructed, if any steel products are to be purchased for or provided in the construction, repair, or improvement project, steel for that project must meet the division (F) definition, except that division (D) allows the director of transportation to authorize a minimal amount of foreign steel products for public bridge contracts. This rule applies to state-funded work and does not print the federal component percents. Do not add federal percentages to the Ohio requirement; the page defines its own scope for steel products.
A filled reference table of content tests by publisher
Match the clause governing your contract to the correct percentage before pricing a material. The table below lists the four construction-material tests printed by the governing pages.
Verify the delivery year and contract type against the specific page before applying any percentage.
Illustrative example of one component-cost check
Suppose the total cost of all components is 100. Components mined, produced, or manufactured in the United States cost 70. On the 60 percent line, 70 exceeds 60 percent of 100, so the criterion is met. On the 75 percent line, 70 does not exceed 75 percent of 100, so it is not met.
Write the governing line in today's estimate notes
Today, write the delivery year beside the material, copy the percentage that page prints for that year, and apply it to total component cost. Then use a construction estimate audit before you lock the line.
FAQ about domestic content on a material price
Which four tests are on the construction-material clause?
The clause prints a component-cost test, a foreign iron and steel share limit, a predominantly iron or steel definition, and a price reasonableness test. The component test checks the cost of components mined, produced, or manufactured in the United States against the total component cost. The foreign iron and steel line applies to material consisting wholly or predominantly of iron or steel, limiting foreign iron and steel to less than 5 percent of the cost of all components according to Acquisition.gov. The predominantly test defines the iron or steel content as exceeding 50 percent of the total cost of all components. The price test marks a domestic material as unreasonable when its cost exceeds the cost of foreign material by more than 20 percent.
How does the delivery year change the component test?
The base threshold is 60 percent of the cost of all components. The percentage rises to 65 percent for items delivered in calendar years 2024 through 2028. It rises again to 75 percent for items delivered starting in calendar year 2029 according to Acquisition.gov. Write the delivery year on your worksheet before selecting the percent.
Which lines are supplies only?
The 20 percent and 30 percent lines belong to the supplies cost test, not the construction-material clause. The 20 percent line applies when the lowest domestic offer is from a large business concern according to Acquisition.gov. The 30 percent line applies when the lowest domestic offer is from a small business concern. Do not use these lines for a construction material price.
Why is the charger sentence not a final rule?
It is a request for comment and does not set a final 100 percent rule. The highway page states that FHWA is specifically seeking comment on whether it should modify the waiver to increase the cost threshold of components manufactured in the United States for EV Chargers from 55 percent to up to 100 percent of the cost of all components according to Federal Highway Administration.
What does Ohio require instead?
Ohio law requires steel products as defined in division (F) for a project supported by state capital funds, except that division (D) allows the transportation director to authorize a minimal amount of foreign steel for public bridge contracts, according to Ohio Laws. The page does not print the federal component percents. It sets a domestic steel requirement for state-funded work.