The Buy American Bar Was Just Raised…
Rick Sander, CEO, Tuesday Aug 5, 2021
“Buy American” has been around for a long time – the first “Buy American Act” was passed in 1933, and required US government procurements to provide preference in purchases to US-made products. This was followed by the “Buy America Act” which was part of the Surface Transportation Act of 1982, and requires American products to be purchased for mass transit-related purchases over $150,000. Unfortunately, waivers to this act became commonplace in government procurements.
In response, the Biden Administration has proposed several actions to put teeth in the Buy America Act, especially in light of the amount of transportation spending in the upcoming Federal Infrastructure Bill. These actions were kicked of by the establishment of the Made In America Office (headed by Celeste Drake) to review all waivers to the Buy America Act. Following on this, the Biden Administration is proposing three additional actions to further strengthen Buy American requirements:
- Increasing the threshold for qualifying as “made in the US”: Currently, a product can qualify as “made in the US” if 55% of the component parts are made in the US. The Administration is proposing an immediate increase of this amount to 60%, with a phased increase up to 75%.
- Expansion of the domestic supply chain: With “just in time” procurement, much of the US supply chain has moved overseas, and COVID-19 has further eroded our supply chain resilience. The Biden Administration has proposed pricing preferences to encourage more manufacture of critical parts and resources.
- Increasing reporting requirements for Buy American: Currently, manufacturers only have to state whether they meet the Buy American threshold or not. The new proposal requires reporting the percentage of Buy American components, especially for critical components.
These rules, plus the Made in America Office, should put much-needed teeth into Buy America.
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