# 48 CFR § 25.106: 25.106 Determining reasonableness of cost > Federal · Regulations · In force URL: https://www.frixlaw.com/law-library/statutes/ecfr-48-25.106 ## Section - **Citation:** 48 CFR § 25.106 - **Heading:** 25.106 Determining reasonableness of cost - **Jurisdiction:** Federal - **Kind:** Regulations - **Status:** In force - **Text as of:** September 22, 2026 - **Source:** Publisher's official text - **Location:** Title 48—Federal Acquisition Regulations System > CHAPTER 1—FEDERAL ACQUISITION REGULATION > SUBCHAPTER D—SOCIOECONOMIC PROGRAMS > PART 25—FOREIGN ACQUISITION > Subpart 25.1—Buy American—Supplies ## Text (a) The contracting officer— (1) Must use the evaluation factors in paragraphs (b) and (c) of this section unless the head of the agency makes a written determination that the use of higher factors is more appropriate. If the determination applies to all agency acquisitions, the agency evaluation factors must be published in agency regulations; and (2) Must not apply evaluation factors to offers of eligible products if the acquisition is subject to a trade agreement under subpart 25.4. (b) For end products that are not critical items and do not contain critical components. (1)(i) If there is a domestic offer that is not the low offer, and the restrictions of the Buy American statute apply to the low offer, the contracting officer must determine the reasonableness of the cost of the domestic offer by adding to the price of the low offer, inclusive of duty— (A) 20 percent, if the lowest domestic offer is from a large business concern; or (B) 30 percent, if the lowest domestic offer is from a small business concern. The contracting officer must use this factor, or another factor established in agency regulations, in small business set-asides if the low offer is from a small business concern offering the product of a small business concern that is not a domestic end product (see subpart 19.5). (ii) The price of the domestic offer is reasonable if it does not exceed the evaluated price of the low offer after addition of the appropriate evaluation factor in accordance with paragraph (a) or (b)(1)(i) of this section. See evaluation procedures at subpart 25.5. (2)(i) For end products that are not COTS items and do not consist wholly or predominantly of iron or steel or a combination of both, if the procedures in paragraph (b)(1)(i) of this section result in an unreasonable cost determination for the domestic offer or there is no domestic offer received, and the low offer is for a foreign end product that does not exceed 55 percent domestic content, the contracting officer shall— (A) Treat the lowest offer of a foreign end product that is manufactured in the United States and exceeds 55 percent domestic content as a domestic offer; and (B) Determine the reasonableness of the cost of this offer by applying the evaluation factors listed in paragraph (b)(1)(i) of this section to the low offer. (ii) The price of the lowest offer of a foreign end product that exceeds 55 percent domestic content is reasonable if it does not exceed the evaluated price of the low offer after addition of the appropriate evaluation factor in accordance with paragraph (a) or (b)(1)(i) of this section. See evaluation procedures at subpart 25.5. (iii) The procedures in this paragraph (b)(2) will no longer apply as of January 1, 2030. (c) For end products that are critical items or contain critical components. (1)(i) If there is a domestic offer that is not the low offer, and the restrictions of the Buy American statute apply to the low offer, the contracting officer shall determine the reasonableness of the cost of the domestic offer by adding to the price of the low offer, inclusive of duty— (A) 20 percent, plus the additional preference factor identified for the critical item or end product containing critical components listed at section 25.105, if the lowest domestic offer is from a large business concern; or (B) 30 percent, plus the additional preference factor identified for the critical item or end product containing critical components listed at section 25.105, if the lowest domestic offer is from a small business concern. The contracting officer shall use this factor, or another factor established in agency regulations, in small business set-asides if the low offer is from a small business concern offering the product of a small business concern that is not a domestic end product (see subpart 19.5). (ii) The price of the domestic offer is reasonable if it does not exceed the evaluated price of the low offer after addition of the appropriate evaluation factor in accordance with paragraph (a) or (b) of this section. See evaluation procedures at subpart 25.5. (2)(i) For end products that are not COTS items and do not consist wholly or predominantly of iron or steel or a combination of both, if the procedures in paragraph (c)(1)(ii) of this section result in an unreasonable cost determination for the domestic offer or there is no domestic offer received, and the low offer is for a foreign end product that does not exceed 55 percent domestic content, the contracting officer shall— (A) Treat the lowest offer of a foreign end product that is manufactured in the United States and exceeds 55 percent domestic content as a domestic offer; and (B) Determine the reasonableness of the cost of this offer by applying the evaluation factors listed in paragraph (c)(1) of this section to the low offer. (ii) The price of the lowest offer of a foreign end product that exceeds 55 percent domestic content is reasonable if it does not exceed the evaluated price of the low offer after addition of the appropriate evaluation factor in accordance with paragraph (a) or (b) of this section. See evaluation procedures at subpart 25.5. (iii) The procedures in this paragraph (c)(2) will no longer apply as of January 1, 2030. [64 FR 72419, Dec. 27, 1999, as amended at 79 FR 24209, Apr. 29, 2014; 86 FR 6187, Jan. 19, 2021. Redesignated and amended at 87 FR 12791, Mar. 7, 2022] ## Nearby sections - [48 CFR § 25.100 25.100 Scope of subpart.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.100.md) - [48 CFR § 25.101 25.101 General.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.101.md) - [48 CFR § 25.102 25.102 Policy.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.102.md) - [48 CFR § 25.103 25.103 Exceptions.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.103.md) - [48 CFR § 25.104 25.104 Nonavailable articles.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.104.md) - [48 CFR § 25.105 25.105 Critical components and critical items.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.105.md) - [48 CFR § 25.106 25.106 Determining reasonableness of cost.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.106.md) - [48 CFR § 25.200 25.200 Scope of subpart.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.200.md) - [48 CFR § 25.201 25.201 Policy.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.201.md) - [48 CFR § 25.202 25.202 Exceptions.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.202.md) - [48 CFR § 25.203 25.203 Preaward determinations.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.203.md) - [48 CFR § 25.204 25.204 Evaluating offers of foreign construction material.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.204.md) - [48 CFR § 25.205 25.205 Postaward determinations.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.205.md) - [48 CFR § 25.206 25.206 Noncompliance.](https://www.frixlaw.com/law-library/statutes/ecfr-48-25.206.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/ecfr-48-25.106. Check the current official text before relying on it. Not legal advice.