President Biden Issues Order on “Made in America Laws”
On January 25, 2021, President Biden issued Executive Order (E.O.) 14005 to implement the President’s domestic sourcing and manufacturing policy agenda by tightening federal procurement and contracting requirements and directing rulemaking to favor domestic companies in federal contracts. The E.O.’s aim is to strengthen “Made in America Laws,” which refers to all regulations, rules, and executive orders relating to federal financial assistance awards or federal procurement, including the “Buy American Act.”
A number of different laws and regulations impose requirements for government agencies to prefer U.S.-made and manufactured products over foreign products. In some cases the requirements apply to products made in the United States using imported steel. The best-known such law is the Buy American Act of 1933, which applies to purchases by federal government agencies below certain value thresholds. There are other laws with different names that apply to different categories of government purchases. For example, there is the similarly sounding “Buy America Act,” which applies to purchases made by state and municipal agencies using funds provided by the Department of Transportation’s Federal Transit Administration and Federal Highway Administration; “the Berry Amendment,” which prohibits the Defense Department from purchasing foreign food, clothing and other textile products, and certain tools; and Federal Aviation Administration (FAA) rules implemented under the Airport Improvement Program statute through which the FAA supports construction projects at airports.
The United States has entered into international trade agreements, such as the WTO Government Procurement Agreement and various free trade agreements, such as the U.S.-Mexico-Canada Agreement, that prohibit the federal government from discriminating against products from the member countries when the procurement is above certain value thresholds. These U.S. commitments are implemented under the Trade Agreements Act and the Federal Acquisition Regulation (FAR). These international agreements apply to federal procurements, including those made through GSA Schedule contracts, but not to purchases made by states and municipalities using federal funds.
“Made in America Laws” incorporate exceptions, including the possibility to obtain waivers when in the public interest, including when either the needed product or component is not available from a U.S. manufacturer or the added cost of using domestic sources would significantly increase the cost of a project. Such waivers are administered by different agencies under the different laws.
Updates to Waiver Process