It has been two months since President Biden issued his Buy American Executive Order on January 25, 2021. But it would seem we still have more questions than answers: What specific actions will agencies take to promote the Order's policy? What will the Made in America Office look like? Where can I find more information about proposed waivers? While the answers to these questions are probably still months away, it is important for contractors to understand the possible implications now and plan accordingly.
According to a press release from the White House, President Biden issued his Order weeks after his inauguration to fulfill his campaign promises "to make Buy American real and close loopholes that allow companies to offshore production and jobs while still qualifying for domestic preferences." The Order revokes three previous orders by President Trump on the topic: the April 18, 2017 Order, the January 31, 2019 Order, and the January 14, 2021 Order. It also supersedes another Trump Executive Order, from July 15, 2019, although it is unclear whether it also supersedes the final rule implementing it from January 19, 2021.
President Biden's Order seeks to make several significant changes to Buy American. Under Section 4, it directs the OMB to establish a Made in America Office to oversee agency Buy American waivers. And Section 6 provides for the creation of a website that will publish proposed waivers and whether they have been granted. The intent appears to be to make it more difficult for agencies to issue waivers, having to first go through the centralized Made in America Office to receive approval. By publicizing the waiver process, contractors may be less likely to seek waivers in the first instance and the government may be more reluctant to grant the waiver they receive.
Other provisions only recommend agencies take further action to implement President Biden's Buy American initiative. For example, Section 8 suggests replacing the component test (i.e., over 50% of a product's cost must have a domestic origin), increasing the numerical threshold for domestic content requirements for end products and construction materials, and increasing the price preferences for domestic end products and domestic construction materials.
There is still hardly any information about what impacts President Biden's Order will have. The Order implies that the Made in America Office will be set up and ready to receive agency reports on compliance with Made American Laws within 180 days of the Order-or by July 24, 2021. As of this posting, though, there is no indication the Office has been established on the Executive Office's website. There has also been little in the way of agency activity as well. This is unsurprising given that President Biden's Order recommended they take action within 180 days of the Order. Nonetheless, at least one agency has already issued a funding notice addressing this Order in a notice it recently posted implying it might be more difficult to obtain waivers.
Important changes are coming to Buy American under this Order, but it is still too soon to tell the full extent of the impact. Contractors, however, can likely expect waivers to be harder to obtain going forward and that requests for waivers and their justifications may very soon be accessible by competitors. Contractors should take steps now to adjust supply chains where possible to avoid the consequences these changes may have.
Originally published 25 March 2021.
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