August 4, 2021

Volume XI, Number 216

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August 03, 2021

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New Executive Order Revises Buy American Requirements

On January 25, 2021, President Biden issued an Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers (the “EO”). The purpose of the EO is to strengthen “Made in America Laws,” which include the Buy American Act and other statutes, regulations, rules and Executive Orders that require acquisition of good, products and materials produced or manufactured in the U.S. The EO instructs the Office of Management and Budget (“OMB”) to establish a Made in America Office and appoint a Made in America Director (the “Director”) to oversee implementation of the EO policy.

New Requirements for Requesting Waivers to Domestic Procurement Preferences

Agencies will now be required to submit waivers of Made in America Law requirements to the Director, along with a description and justification of the proposed waiver. Within 45 days of appointing the Director, OMB shall publish:

  • A list of information that that agencies must include in proposed waiver submission; and

  • A deadline, not exceeding 15 days, for notification to the agency of the results of review of the submission or waiving a review of the submission;

After reviewing the agency’s proposed waiver submission, the Director will provide notification of the decision to grant or reject the waiver in writing. The Director will provide a written explanation where a requested waiver is denied. If the agency disagrees with the decision, it can inform the Director in writing, and the disagreement will be resolved through the procedures described in Section 7 of Executive Order 12866 (Regulatory Planning and Review).

Information regarding proposed waivers and whether they have been granted will be published on a public website. OMB will make proposed waiver submissions available to the public, to the extent permitted by law.

Amendments to the FAR

The FAR Council must consider proposing amendments to the FAR within 180 days of the EO. These amendments include:

  • Replacing the “component test” in Part 25 of the FAR, which is used to identify domestic end products and construction materials, with a test which measures the value added to the product through U.S.-based production or U.S.-job supporting economic activity;

  • Increasing the numerical threshold for domestic content requirements (currently 55%); and

  • Increasing price preferences (i.e., the difference in price over which an agency can buy from a non-U.S. supplier; currently 20% for large businesses and 30% for small businesses) for domestic end products and construction materials.

The EO also requires the Director of OMB, in consultation with the Secretary of Commerce and the Made in America Director, to make determinations of availability before the FAR Council may amend the list of domestically non-available articles in Section 25.104(a). The Director of OMB must find a “reasonable basis” to conclude that articles on the list are not “mined, produced, or manufactured in the US in sufficient and reasonably available commercial qualifies and of a satisfactory quality.”

The EO also encourages the FAR Council to list any constraints on extending the domestic preference requirements to information technology that are commercial items.

Agency Reporting

Within 180 days of the EO, agencies must submit an initial report to the Director describing the agency’s current compliance with Made in America laws, the agency’s use of longstanding or nationwide waivers and their consistency with the EO’s policy, and recommendations for implementing the policy. The EO requires agencies to submit this report bi-annually, with updated analysis on where domestic preference requirements have been waived and how waivers have affected agency spending.

Agencies are also directed to partner with Hollings Manufacturing Extension Partnership  to conduct “supplier scouting,” though which they will identify American companies, including small- and medium-sized companies, with the capability to produce and manufacture products in the U.S. that meet Federal procurement needs.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume XI, Number 34
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About this Author

Gregory S. Jacobs, Shareholder | Practice Chair, DC, Government Contracts International International Trade
Shareholder | Practice Chair

Companies turn to Greg Jacobs for help with all aspects of their government contracts and national security legal needs.

Greg is the Chair of Polsinelli’s Government Contracts Group. An experienced litigator, Greg leads trial teams in cases before the Boards of Contract Appeals and in state and federal courts. Greg also has extensive bid protest experience before the Government Accountability Office and Court of Federal Claims. In addition, Greg counsels government contractors and grantees on transactions, compliance matters, and mandatory and voluntary disclosures. 

...

202-626-8368
Erin Felix, Associate, Polsinelli
Associate

Erin Felix learned the government contracts industry from the inside out. For 15 years prior to practicing law, Erin managed government and commercial contracts and subcontracts for one of the largest defense contractors in the United States. This unique, hands-on experience in the government contracts industry allows her to ‘speak the client’s language’ and gives her an intimate understanding of contractors’ business priorities and challenges. Clients value Erin’s practical approach to problem resolution and the innovative ideas she brings to the table. 

Erin counsels government...

202-626-8375
Elise S. Seale Government Contracts Attorney Polsinelli Washington, D.C.
Associate

As an associate in the Government Contracts practice, Elise partners with Polsinelli attorneys to represent clients in a full range of procurement and compliance matters. She assists on a wide variety of government contracting issues, including negotiations, compliance, bid protests, claims and disputes. She is committed to understanding each client’s business providing thoughtful answers to each client’s questions in support of their objectives.

Prior to joining the firm, Elise worked as a Polsinelli summer associate. During her time in law school, she also worked with public...

202-772-1495
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