Thursday, January 19, 2012

Guidance on New USAID Rules for Source and Nationality (Revised 22CFR228)

The revised final 22 CFR Part 228 (Procurement of Commodities and Services Financed by USAID Federal Program Funds) sets out the following rules which must be followed as of the effective date of February 6th, 2012:


Under USAID Prime Contracts and/or Grants and Cooperative Agreements, there are restrictions related to procurement of goods and services from designated geographic code countries.

Under the new rules, all contracts and grant/cooperative agreements will include one of the following codes:

• 937 (USAID Principle Geographic Code )
• 935 (Free World – all countries except prohibited source countries)
• 110 (New Independent State – former USSR republics)

Under USAID Cooperative Agreements and Grants, an additional order of preference may apply, even if the Geographic Code listed in the award is 935 (Free World). The order of preference is normally contained in a Mandatory Standard Provision “USAID Eligibility Rules for Goods and Services” and requires that a memo to file is kept documenting the choice of source and nationality in accordance with the preference order.


The rules of Source and Nationality apply to all individual transactions above $25,000.

Any individual transaction not exceeding $25,000 can be performed from a Source/Nationality of Geographic Code 935 (Free World excluding prohibited sources).

The $25,000 exclusion DOES NOT apply to those transactions covered by special procurement rules (i.e. ag commodities, vehicles, pharmaceuticals, pesticides, fertilizer and used equipment).

Attached is an overall guidance on the new Rules of Source and Nationality and how they are applied for procurements of goods and services under USAID financed programs.