US President Joe Biden on Wednesday proposed a “Buy American” rule to support US workers and businesses and promote US manufacturing, as a follow up to his signing of Executive Order 14005, titled “Ensuring the Future is Made in All of America by All of America’s Workers,” which launched a federal initiative to strengthen support for US manufacturing.
Described as the “most robust changes to the implementation of the Buy American Act (“the Act”) in almost 70 years,” Biden’s proposal aims to increase US content in the products the federal government buys and support the domestic production of goods and services critical to US national and economic security.
The proposed rule aims to achieve three objectives. First, the rule would change the definition of “substantially all” with respect to the Act, which requires that “products bought with taxpayer dollars must substantially all be made in the US.” The proposal calls for an immediate increase of the threshold meeting this standard from 55 percent to 60 percent, and ultimately to 75 percent in phases. The objective here is to close loopholes in the current regulation while simultaneously giving businesses time to adjust their supply chains to increase the use of US-made components.
Second, the rule would apply enhanced price preferences for select critical products and components identified by the Critical Supply Chain review mandated under Executive Order 14017, and the pandemic supply chain strategy mandated under Executive Order 14001. Here, the objective is to ensure access to certain domestic critical goods that are important to the health, safety, and livelihoods of Americans, while simultaneously enhancing national and economic security by reducing or eliminating reliance on foreign sources.
Finally, the rule aims to increase transparency and accountability by enhancing disclosure and reporting requirements that would ensure compliance with the Act and improve the quality of data on the US content in goods. This is another attempt at closing a different loophole that currently lets companies skate through with merely confirming whether they meet the content threshold.
Pointing that the Biden-Harris Administration has “not waited for new rules to go into place in order to Buy American,” the White House highlighted that US agencies and even the president’s COVID-19 Response Team have incurred more than $2 billion in new purchases to support the manufacturing of innovative technologies and products in America.
The White House also highlighted its investments in workforce training and small business supports “that will bolster the President’s Made in America agenda,” and pointed to President Biden’s Made in America Office created in April that reviews proposed waivers of Made-in-America laws and helps agencies use taxpayer dollars to support US manufacturing.
The White House noted that this rule would be just the first set of proposed reforms to procurement policy under the Biden-Harris Administration, and that more will be on the way.