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Senate Democrats Double Down on “Buy American”

As we reported last month, four Senate Democrats published an article about “strengthen[ing]” the U.S. Government’s “Buy American policies” through certain proposed amendments to the FY 2018 National Defense Authorization Act (“NDAA”). Although most of the proposed “Buy American” amendments were left out of the version of the bill that was sent to conference, 16 Senate Democrats – including Senators Tammy Baldwin (WI), Debbie Stabenow (MI), Al Franken (MN), Chris Murphy (CT) and Elizabeth Warren (MA) – are now doubling down on their efforts to remove a section in the Senate-passed FY 2018 NDAA that would eliminate “Buy American” protections for certain defense items.

Senators Issue Letter To Maintain “Buy American” Status Quo For Certain Items

On October 20th, one-third of the Senate Democratic caucus wrote the Chairman and Ranking Members of the Senate and House Committees on Armed Services to “request that section 863 of the Senate-passed bill, which eliminates a number of critical Buy American requirements in defense procurement laws, be excluded from the final NDAA conference bill.” The senators explained that “[d]oing so is a commonsense . . . policy” because it “supports our domestic industrial base and our national and economic security.” Further, in a recent press release, Sen. Franken noted specifically that section 863 would “open[] taxpayer-funded defense contracts to unfairly-subsidized foreign competition” and “risk[] American jobs.”

Section 863 would terminate a requirement to procure certain defense items (i.e., passenger buses, certain chemical weapons antidotes, certain components for naval vessels, certain valves and machine tools, and photovoltaic devices) from within the National Technology and Industrial Base (“NTIB”) – meaning the United States, Canada, the United Kingdom, and Australia. Senator Baldwin (along with 15 Democratic colleagues) previously sponsored SA 329, which would have struck section 863 and thereby continued the current NTIB sourcing requirement.

Notably, this effort represents an alignment by Democrats with certain high-profile Trump priorities. For example, in their October 20th letter, the senators pointed out that the “Trump Administration opposes section 863 of the Senate-passed bill,” in part, because “[t]he existing procurement requirements act as a key guarantor of strategic supply chain security.” They also explained that “[e]roding Buy American requirements also runs counter” to President Trump’s “Buy American” Executive Order and Manufacturing and Defense Industrial Base Executive Order.

Senator Murphy Separately Introduced an Amendment to Increase Buy American Transparency

Senator Murphy also continued to press forward with his efforts to strengthen Buy American protections. On October 19, Sen. Murphy proposed S.A.1232 to H.Con.Res.71 (the FY 2018 budget resolution) to provide a “deficit-neutral reserve fund relating to increasing transparency with regard to waivers to the Buy American Act, the Berry Amendment, the Buy America Act, and Section 2533b of Title 10, United States Code.” In a statement about this amendment, the senator explained that “[s]hining a light on the widespread misuse of taxpayer money and the millions of dollars going to foreign companies should give Congress the kick in the butt they need to start fixing our broken Buy American laws. Both Republicans and Democrats should support this commonsense amendment.”

Takeaway

Like the Trump Administration, Senate Democrats continue to focus their efforts on strengthening certain “Buy American” requirements. Given this shared interest, we would not be surprised if both sides reached across the aisle on more comprehensive efforts at some point in the future. An opportunity to work together could come as early as next month when Commerce Secretary Ross (in consultation with Secretary of State Rex Tillerson, OMB Director Mick Mulvaney and U.S. Trade Representative Robert Lighthizer) must submit a report to President Trump that provides “specific recommendations to strengthen implementation of Buy American Laws, including domestic procurement preference policies and programs.” This report could very well provide a spark that ignites legislative or regulatory “Buy American” action.

© 2019 Covington & Burling LLP

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About this Author

Justin Ganderson, government contracts lawyer, Covington
Special Counsel

Justin Ganderson is Special Counsel in the firm’s Washington, DC office and a member of the Government Contracts Practice Group. Mr. Ganderson focuses his practice in the areas of claims and disputes resolution, internal investigations, public and private partnerships, utility privatizations, and general federal government contract counseling.

Mr. Ganderson has extensive experience in preparing and crafting requests for equitable adjustments and Contract Disputes Act (CDA) claims, and resolving disputes with government agencies prior to the commencement of...

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Jeff Bozman, Government contracts attorney, Covington Burling
Associate

Jeff Bozman draws on his past experience as a Marine Corps officer to advise companies who do business with the United States Government. Mr. Bozman’s practice includes procurement law and public policy, with an emphasis on national security issues. He has successfully represented clients in bid protests at both the GAO and the U.S. Court of Federal Claims.

Mr. Bozman helps companies secure approval from the Committee on Foreign Investment in the United States (“CFIUS”) and craft efficient strategies to mitigate issues of foreign ownership, control or influence (“FOCI”). Mr. Bozman also advises government contractors on developments in labor and employment law, particularly with respect to Service Contract Act compliance.

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E. Sanderson Hoe, Covington Burling, Contracts Lawyer, Negotiations Attorney
Senior Of Counsel

Sandy Hoe has practiced government contracts law for more than 40 years.  His expertise includes issues of contract formation, negotiation of subcontracts, bid protests, the structuring of complex private financing of government contracts, preparation of complex claims, and the resolution of post-award contract disputes through litigation or alternative dispute resolution.  His clients include major companies in the defense, telecommunications, information technology, financial, construction, and health care industries.

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