The update to the Buy American Act would build on the administration’s push to get federal agencies using more domestic products and services.
President Biden announced on Friday more actions to honor his “Made in America” commitments for federal procurement.
On Friday, the White House shared details of a pending final rule that will update the Buy American Act. The law, which dates back to 1933, pushes federal agencies to procure materials and products made in the United States. The new rule would build on the Biden administration’s “Made in America” efforts, first announced in a January 2021 executive order.
“The federal government spends more than $600 billion each year buying goods and services,” according to a fact-sheet from the White House. “President Biden believes that when taxpayers foot the bill, that spending should invest in American workers, manufacturers, and small businesses.”
Currently, “products qualify as Made in America for federal procurement if 55% of the value of their component parts are manufactured here,” the fact-sheet continued. “This final rule will increase that threshold to 60% this year, 65 % in 2024, and 75% in 2029.” The White House said the changes will close loopholes with the current regulations and create more opportunities for small and medium businesses as well as those that are disadvantaged.
The rule will also establish a framework for the government “to apply enhanced price preferences to select critical products and components identified in a subsequent rulemaking,” according to the fact-sheet. “These preferences, once in place, will support the development and expansion of domestic supply chains for critical products by providing a source of stable demand for domestically-produced critical products.”
While final rules usually take effect 30 days after publication, the delay until next fiscal year for this rule will “allow industry to prepare for the new domestic content threshold and give the acquisition workforce time to be trained for the new concepts contained in this rule, helping to ensure a smoother transition to the rule’s new requirements,” said the rule’s text.
“It's unclear how many companies or products this will impact since the new Buy American rule coming out of the Federal Acquisition Regulatory Council does not include an update allowing the federal government to verify claims made by contractors about the percentage of domestically made content in their products,” CNN noted. “[A senior administration official] noted, however, that the administration still expects to ultimately institute a reporting requirement for companies -- something the president pledged when he announced the proposal last year.”
Biden and Barbara Humpton, president and CEO of Siemens USA, also announced that the technology company is investing $54 million to expand domestic production and will create 300 jobs manufacturing electric vehicle infrastructure. Ahead of Friday’s news, Lonnie Stephenson, international president of the International Brotherhood of Electrical Workers, said the Biden administration’s Made in America efforts “support good-paying, union jobs across the country.”
The new rule came on the heels of Biden’s State of the Union earlier in the week during which he touted his administration's “Buy American” efforts.
“We’ll buy American to make sure everything from the deck of an aircraft carrier to the steel on highway guardrails is made in America from beginning to end,” the president said.
His administration has also created a new Made in America office within the Office of Management and Budget, a website to increase transparency of waivers to domestic purchasing, and a council to coordinate these efforts across the government.
In his remarks on Friday, Biden said that during his first Cabinet meeting, he told members that if their agencies want to issue a waiver “they have to come to the White House office …and explain to me why they have to do that and they’re going to have to post the request publicly on our sites, so American manufacturers and business have a chance to raise their hands and say ‘no no no, I can do that.’”
Celeste Drake, director of the Made in America Office, said during the event, “our strategy is working; businesses are investing in American manufacturing at historic rates and our economy has added 400, 230 manufacturing jobs since the president came into office.”
This story was updated at 2:26 pET.