On January 25, 2021, President Biden signed an Executive Order, Ensuring the Future is Made in All of America by All of America’s Workers, as part of his economic agenda aimed at strengthening current “Made in America” laws. The Executive Order announces that the new Administration’s policy will be to maximize the use of goods, products, and materials produced in, and services offered in, the US as related to federal contracts and grants. Services have not traditionally been subject to Buy American Act requirements.
The Executive Order also directs the Federal Acquisition Regulatory (FAR) Counsel to consider proposing for notice and public comment, changes to existing Buy American Act (41 U.S.C.A. §§ 8301-8305) rules related to federal procurement requirements, including replacing the “cost of component test” with a new test for identifying domestic end products that measures domestic content based on value that is added to the product through:
- US-based production or US job-supporting economic activity.
- Increasing the percentage threshold for domestic content requirements for end products and the price preferences provided to domestic end products.
- Developing recommendations for lifting the Buy American Act’s exception for information technology that is a commercial item.
- Updating the list of “nonavailable articles” that are exempt from the Buy American Act to determine if there is still a reasonable basis to conclude these articles are not mined, produced, or manufactured in the US in reasonably available commercial quantities and of a sufficient quality.
The Executive Order also:
- Requires federal agencies to consider suspending, revising, or rescinding existing “agency actions” or undertaking additional agency actions to carry out the Buy American policy.
- Creates a centralized process for review and approval of waivers of Made in America laws. A new Made in America Office, established within the Office of Management and Budget (OMB) and headed by the newly created Made in America Director, will be responsible for reviewing proposed waivers of Made in America laws.
- Requires federal agencies to consider the source of any cost advantage of foreign-sourced products before granting a public interest waiver. The Executive Order requires federal agencies to consider whether any cost advantage of a foreign-sourced product results from the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufacturing goods.
Heads of federal agencies are directed to submit to the Made in America Director a report on their agency’s implementation of, and compliance with, Made in America laws within 180 days and then bi-annually following the initial report.
If you have questions about the Buy American Act, or any other facet of business law, We’re happy to help!