Biden Administration Issues Executive Order on Made in America Laws
President Joe Biden signed on Jan. 25, 2021, executive order (EO) "Ensuring the Future Is Made in All of America by All of America's Workers," that directs a process for updating domestic preferences. This EO builds upon a previous executive order signed by former President Donald Trump (EO number 13881) that was just instituted with final regulations earlier this month (as discussed in a previous blog post).1 The executive action signals that the new administration is focused on domestic preferences in federal procurement.
Further, the order's waivers and review of domestic preference provisions concern a wide swath of domestic preference laws designated as "Made in America Laws," which includes all statutes, regulations, rules and EOs relating to Buy America, Buy American or providing a preference for domestic goods, products or materials.
We have summarized some of the more notable directives from the EO below.
Directs agencies to close current loopholes in how domestic content is measured and increase domestic content requirements
The executive action directs the Federal Acquisition Regulatory (FAR) Council to consider amending the Buy American Act (BAA) to, among other things:
- Replace the component test currently in FAR Part 25, which is used to identify domestic end products and construction materials with a test that measures domestic content by the value added to the product through U.S.-based production or U.S. job-supporting economic activity
- Increase the numerical threshold for domestic content requirements for end products and construction materials
- Increase the price preferences for domestic end products and domestic construction materials
Notably, the order does not specify specific numbers for domestic content requirements or domestic price preferences – and it is unclear how much the percentages will increase given the implementation of the Trump Administration's July 2019 EO.
Creates a Made in America Office under OMB to increase oversight of potential waivers
The EO creates a Made in America Office (MAO) under the Office of Management and Budget (OMB) to update and centralize the Made in America waiver process in an effort to increase oversight of potential waivers of domestic preference laws. The order also appoints a new senior official – the Made in America Director – to oversee the MAO.
Before an agency can grant a Made in America waiver, the agency is now required to provide the director with a description of its proposed waiver and a detailed justification for the use of goods, products or materials that have not been mined, produced or manufactured in the United States. The order provides that a published list of information agencies will be required to submit is forthcoming.
Develops a public website in an effort to increase transparency in federal procurement
Pursuant to the EO, a public website will be created to include information on all proposed waivers (and an agency's justification for the waiver) and whether the waivers have been granted.
Requires the use of supplier scouting
Under the order, federal agencies are required to conduct "supplier scouting" to identify American companies – including small and medium-sized companies – that are able to produce goods, products and materials in the United States that meet the agency's procurement needs.
Directs the FAR Council to review Made in America Laws' Application to IT
The order directs the FAR Council to review utilizing Made in American Laws more comprehensively on information technology (IT) and to make recommendations for lifting any constraints for doing so.
Directs a cross-agency review of all domestic preferences
The EO requires agencies to report on their implementation of current Made in America laws and make recommendations for achieving the president's Made in America goals, and to continue to do so on a biannual basis. Specifically, agencies are required to submit biannual reports to the new MAO director regarding 1) ongoing implementation of, and compliance with, Made in America Laws; 2) analysis of goods, products, materials and services not subject to Made in America Laws or where requirements have been waived; 3) analysis of spending as a result of waivers issued pursuant to the Trade Agreements Act (separated by country of origin); and 4) recommendations for how to further effectuate President Biden's Made in America goals.
Rescinds previous Executive Orders
Finally, the EO rescinded previous EOs including:
- Executive Order 13788 of April 18, 2017 (Buy American and Hire American)
- Section 5 of Executive Order 13858 of Jan. 31, 2019 (Strengthening Buy-American Preferences for Infrastructure Projects)
- Executive Order 13975 of Jan. 14, 2021 (Encouraging Buy American Policies for the United States Postal Service)
- Executive Order 10582 of Dec. 17, 1954 (Prescribing Uniform Procedures for Certain Determinations Under the Buy-America Act) to the extent inconsistent with this EO
- Executive Order 13881 of July 15, 2019 (Maximizing Use of American-Made Goods, Products, and Materials), to the extent inconsistent with this EO
This EO makes clear that the Biden Administration is intent in remaking how the government prioritizes the purchase of American-made goods – especially with a sweeping EO less than a week into the administration. We will continue to monitor developments and the progress of this EO including any regulations that follow.
1 As discussed below, EO 13881 was superseded by this EO to the extent it is "inconsistent with this order." It is possible that the FAR Council could revisit the regulations it just released under President Donald Trump's EO.