White House Expands Buy American RuleJuly 28, 2021
Yesterday, President Joe Biden announced the biggest changes to the implementation of the Buy American Act in almost 70 years. The proposal would increase U.S. content in the products the federal government buys and support the domestic production of critical products.
In January, Biden signed an executive order (EO) to launch a government-wide initiative to increase the use of federal procurement to support American manufacturing.
Specifically, the proposed rule directs the following changes to the Buy American requirements:
- Raise the domestic content threshold – today, products could qualify if just 55 percent of the value of the component parts was manufactured domestically. The rule proposes an immediate increase of the threshold to 60 percent and a phased increase to 75 percent. This change could create more opportunities for small- and medium-sized manufacturers and their employees. The Small Business Administration (SBA) has created a new manufacturing office in its federal contracting division to support this work.
- Strengthen domestic supply chains for critical goods with new price preferences. These preferences, once in place, would support the development and expansion of domestic supply chains for critical products by providing a source of stable demand for domestically produced critical products.
- Increase transparency and accountability in Buy American rules. The new reporting requirement would aim to bolster compliance with the Buy American Act and improve data on the actual U.S. content of goods purchased.
The White House has released a fact sheet with details of the proposal. The fact sheet also notes that this proposed rule marks just the first set of proposed reforms to procurement policy under the Biden-Harris Administration to ensure taxpayer dollars help America’s businesses compete in strategic industries and help ensure America’s workers thrive.
The proposed rule will be published with a 60-day comment period, which includes a public meeting and a review of all the comments, before a final rule is issued.