The supply chain issues that the Covid-19 pandemic laid bare combined with ill-advised “redevelopment” of industrial zones in major cities, such as New York shows how vital homemade manufacturing is. Workers across the supply chain, in industrial fields were the ones deemed essential (along with workers in healthcare and first responders). To strengthen the American manufacturing sector, President Biden signed an executive order to strengthen the federal government’s Buy American rules.
The money the federal government spends on goods and services is a powerful tool to support American workers and manufacturers. Contracting alone accounts for almost $600 billion in federal spending. Existing law already requires the federal government to contract with American companies “when possible”, however, there are many loopholes that have frustrated advocates for small and mid-size businesses, as well as presidential administrations for years.
The new Buy American order looks to succeed where others have failed by:
- Directs agencies to close current loopholes in how domestic content is measured and increase domestic content requirements. Existing rules establish a domestic content threshold. This Executive Order directs an increase in both the threshold and the price preferences for domestic goods.
- Appoints a new senior leader in the Executive Office of the President in charge of the government’s Made-in-America policy approach. The new Director of Made-in-America at the Office of Management and Budget (OMB) will oversee the implementation of this Executive Order.
- Increases oversight of potential waivers to domestic preference laws. This creates a central review of agency waivers of Buy American requirement and directs the General Services Administration (GSA) to publish relevant waivers on a publicly available website.
- Connects new businesses to contracting opportunities by requiring active use of supplier scouting by agencies. This directs agencies to utilize the Manufacturing Extension Partnership (all 50 states and Puerto Rico) that supports small and medium-sized manufacturers.
- Reiterates support for the Jones Act. Mandate that only U.S.-flag vessels carry cargo between U.S. ports.
- Directs a cross-agency review of all domestic preferences. This requires agencies to report on their implementation of current Made in America laws and make recommendations for improvement.
- Federal purchasing. The priorities of this administration include clean energy and critical supply chains, grow good-paying, union jobs, and advance racial equity.
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