# Buy American Act Domestic Content Calculator

> Source: https://netray.co/tools/buy-american-act-domestic-content-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Check whether a manufactured end product meets the domestic content percentage by comparing domestic and foreign component cost.

## Category

compliance-legal

## Region

United States

## Industry

Aerospace & Defense

## Audience

- Contracts manager
- Supply chain manager
- Compliance officer
- Buyer

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Cost of domestic components

**Key:** domestic

**Type:** number

**Default:** 612000

**Min:** 0

**Step:** 1000

**Unit:** $

**Help:** Components mined, produced or manufactured in the United States.

#### Cost of foreign components

**Key:** foreign

**Type:** number

**Default:** 288000

**Min:** 0

**Step:** 1000

**Unit:** $

**Help:** Components from non-domestic sources. Include components of unknown origin here.

#### Required domestic content

**Key:** threshold

**Type:** select

**Default:** 65

**Options:**

##### 60% (older contracts)

**Value:** 60

##### 65% (current civilian threshold)

**Value:** 65

##### 75% (scheduled later step)

**Value:** 75

##### 55% (DoD supplies, older rule)

**Value:** 55

#### Units in the award

**Key:** units

**Type:** number

**Default:** 40

**Min:** 1

**Step:** 1

**Unit:** units

**Outputs:**

#### Total component cost

**Key:** total

**Expr:** domestic + foreign

**Format:** currency

#### Domestic content

**Key:** pct

**Expr:** if(gt(total, 0), domestic / total * 100, 0)

**Format:** percent

**Primary:** true

**Description:** Domestic component cost divided by total component cost.

#### Domestic cost needed to pass

**Key:** required

**Expr:** total * threshold / 100

**Format:** currency

#### Shortfall in domestic spend

**Key:** gap

**Expr:** max(0, required - domestic)

**Format:** currency

**Primary:** true

**Description:** How much foreign content would need to move to domestic sources.

#### Shortfall per unit

**Key:** gap_unit

**Expr:** gap / units

**Format:** currency

#### Content headroom above threshold

**Key:** headroom

**Expr:** max(0, pct - threshold)

**Format:** percent

**Chart:**

#### Domestic content vs domestic component spend

**Type:** line

**X:** domestic

**From:** 0

**To:** 900000

**Steps:** 30

**Series:**

- pct

**Disclaimer:** Simplified test of the cost-of-components approach. Applicable thresholds, exceptions for commercially available off-the-shelf items, trade agreement coverage and the Defense Federal Acquisition Regulation Supplement may change the answer. Confirm with your contracts counsel.

## Content

**Intro:** Under the Buy American Act, a manufactured end product is domestic when it is manufactured in the United States and the cost of its domestic components exceeds a set percentage of the cost of all components. This calculator does the arithmetic and shows how much sourcing would have to shift to pass.

**Sections:**

#### How to use the calculator

**Body:** Take your bill of materials and total the cost of components that are domestic and those that are not. Unknown origin counts as foreign until a supplier certifies otherwise. Enter both numbers, select the threshold that applies to your solicitation and the number of units in the award. The primary results are your domestic content percentage and the dollar shortfall, if any, needed to reach the threshold.

#### The test behind the numbers

**Body:** The Federal Acquisition Regulation defines a domestic end product as one manufactured in the United States where the cost of domestic components exceeds the required percentage of the cost of all components. The percentage has been stepped up over time, with the current civilian figure at 65 percent and a later step planned for 75 percent. Component cost generally means the acquisition cost including transportation to the place of manufacture, duty and applicable overhead, but not the manufacturer's own labor on the end product. Confirm the version of the clause in your solicitation.

**Bullets:**

- Manufactured in the United States
- Domestic component cost over a set share of all component cost
- Thresholds depend on the date and clause in the solicitation
- Unknown origin should be treated as foreign

#### Using the shortfall

**Body:** If your product fails the test, the shortfall tells you how much spend to move. Rank foreign components by cost and check whether a domestic source exists at an acceptable price. Replacing one expensive foreign subassembly can close the gap faster than changing many small parts. The chart shows how the percentage climbs as domestic spend rises, which helps purchasing and engineering set targets on a redesign.

#### Common mistakes and ERP notes

**Body:** Frequent mistakes include using sales price instead of component cost, forgetting transportation and duty in component cost, treating country of the supplier address as country of origin of the part, and ignoring exemptions or trade agreements that change which test applies. Store country of origin on the item and supplier record in your ERP and require supplier declarations so the calculation can run from a BOM rollup instead of a one-time spreadsheet.

**Cta:** Netray can help add country-of-origin data to your item master and run a domestic content rollup from your ERP bill of materials with your contracts team reviewing the result.

**Faq:**

#### What percentage of a product must be domestic?

**Answer:** For most current civilian procurements the domestic component cost must exceed 65 percent of the total component cost, with a planned step to 75 percent later. Earlier contracts used lower percentages. Check the clause and date in your solicitation because the threshold depends on both.

#### Does labor count toward domestic content?

**Answer:** The test is a cost of components test. The manufacturer's own labor on the end product is not part of the component cost used here. The product must be manufactured in the United States, but assembly labor does not raise the component percentage.

#### How do I treat parts of unknown origin?

**Answer:** Treat them as foreign for the calculation until the supplier provides a documented country of origin. Asking suppliers for a signed origin declaration is a practical step, and it also protects you in an audit by showing you made reasonable efforts.

#### Is this the same as the Trade Agreements Act?

**Answer:** No. The Buy American Act and the Trade Agreements Act use different tests. The Trade Agreements Act relies on substantial transformation and designated country origin. Which law applies depends on contract value, agency and the product, so confirm with contracts counsel.

## Search terms

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