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Tag: Federal Acquisition Regulatory Council

The push to buy “Made in America” just got bigger

Last week President Biden announced actions to amplify his “made in America” pledge for federal procurements. These actions came in the form of a pending final rule that builds on the Biden administration’s “Made in America” efforts, announced via executive order in January of 2021. (Federal Computer Week March 8, 2022)

To qualify as “Made in America” for federal procurement, at least 55% of the value of the component parts of a product must be made in the US. The final rule will increase the threshold to 60% in 2022, 65% in 2024, and 75% in 2029, and close any current regulation loopholes. Additionally, it will create more opportunities for small and medium-sized and disadvantaged businesses. (ibid)

The final rule also institutes a foundation for the government “to apply enhanced price preferences to select critical products and components identified in a subsequent rulemaking,” according to a fact-sheet from the White House. “These preferences, once in place, will support the development and expansion of domestic supply chains. They provide a source of stable demand for domestically-produced critical products.” (ibid)

To smooth the transition and assist industry in their preparation for the new domestic content threshold, the final rule will take effect on October 25. This allows time to train the acquisition workforce on the new concepts of the final rule. (ibid)

Currently, there is no ability to verify claims made by contractors regarding the percentage of domestically made content in their products. The Administration plans to institute a reporting requirement validating the percentage of domestically made content in products. Biden pledged this during his announcement, last year. (ibid)

During President Biden’s State of the Union address, he said, “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.” According to Lonnie Stephenson, international president of the International Brotherhood of Electrical Workers, the Biden administration’s Made in America efforts “support good-paying, union jobs across the country.”

A new Made in America office is being created within the Office of the Management and Budget. Celeste Drake, director of the Made in America Office, recently said, “our strategy is working; businesses are investing in American manufacturing at historic rates.”

Questions about the “Made in America” rule and your current government contract or an upcoming proposal? Give us a call.

New ‘Made in America’ EO

On 25 January, President Biden issued a “Made in All of America by All of America’s Workers” executive order. (Government Executive, February 24, 2021)

Before the executive order takes effect:

  • New rules mandating the executive order must go through the formal rule-making process
  • Within 180 days, the Federal Acquisition Regulatory Council should consider replacing the “component test” (50 percent of a product’s cost must have a domestic origin)
  • The threshold for domestic content requirements for construction materials and end products will be increased, as well price preferences for domestic construction materials and end products

The order directs the FAR Council to assess exceptions from the Act for commercial information technology (IT). Recommendations will likely influence solution strategies. A Made in America office within the Office of Management and Budget (OMB) will be created, which will review waivers to purchase goods from outside the United States. Additionally, the Order mandates a list of actions to be performed within 45 days of the office director’s appointment. (ibid)

Biden’s EO also proposes that GSA create a public website for proposed waivers. Justification for all waivers will be publicly available, giving competitors the ability to weigh-in on waiver requests, likely diminishing the issuance of waivers. Contractors should consider this when determining their sourcing approach. (ibid)

Questions concerning your current as well as future government contracts and how the new order will affect them? Give us a call.