Executive Order Increases Scrutiny on Buy American Act and Made in America Products

A new executive order (EO) aimed at strengthening enforcement of "Made in America" claims signals increased scrutiny for companies selling products in the U.S. – including those supplying the federal government. The EO directs the Federal Trade Commission (FTC) to prioritize enforcement against deceptive origin claims and consider new rules addressing online marketplaces that fail to verify sellers' country-of-origin representations. It also encourages federal agencies with oversight of country-of-origin labeling to promote consistent guidance on voluntary "Made in USA" labeling.

Application to Federal Contractors

• Though much of the EO focuses on consumer protection and online marketplaces, Section 2(d) focuses directly on federal procurement and highlights potentially significant consequences for contractors or vendors who are found to misrepresent an American-origin status.
• The provision directs agencies overseeing government-wide acquisition contracts (GWACs), Multiple Award Schedule¹ (MAS) contracts and other government-wide indefinite-delivery, indefinite-quantity (IDIQ) vehicles to "periodically review and verify" claims such as "Buy American Act," "Country-of-Origin USA" or similar American-origin representations associated with products sold through these contracts. This language suggests that contracting officers and other agency personnel may no longer solely rely on contractor certifications and statements that they comply with the relevant American-origin standard but may require affirmative review and verification of those assertions.
• Although MAS contracts have been subject to periodic audits such as Contractor Assistance Visits (CAVs), GWACs and other government‑wide vehicles may not have conducted the level of scrutiny now required under the EO. The U.S. General Services Administration (GSA) has affirmatively monitored country-of-origin issues through CAVs and stayed alert to changes in manufacturing locations. In the past, the GSA has notified contractors of noncompliance, where the GSA identified or was made aware of the noncompliance. In those instances, the GSA permitted a contractor to remove noncompliant products from their GSA Schedule unless the noncompliance was egregious.

Multiple Standards for "American-Made"

A potential compliance gap stems from the different requirements governing origin claims under federal procurement law and consumer protection law. Companies that sell products to private consumers and the federal government therefore face, at a minimum, dual regulatory exposure.

• The Buy American Act (BAA) applies to goods purchased directly by the federal government and governs the representation of "domestic end products." Under the BAA and Federal Acquisition Regulation (FAR) Part 25, a product generally qualifies as a domestic end product if 1) the end product is manufactured in the U.S. and 2) the cost of domestic components exceeds a specified percentage of the cost of all components (currently 65 percent for items delivered in calendar year 2026, and increasing to 75 percent for items delivered starting in calendar year 2029).
• The "Made in USA" standard is regulated by the FTC and is significantly stricter than the BAA. Under FTC regulations implementing Section 5 of the FTC Act, a product must be "all or virtually all" made in the U.S. – meaning that final assembly, all significant processing and essentially all components or ingredients must be of U.S. origin.
• The result is a potential compliance disconnect. For example, a product may satisfy the BAA's domestic content threshold for federal procurement purposes but fail to meet the FTC's "all or virtually all" standard for consumer marketing claims.
• The EO may also implicate other American‑origin representations not expressly named, including "U.S.-made end products" under the Trade Agreements Act (TAA)² and the Nonmanufacturer Rule (NMR), each of which applies distinct domestic‑preference tests. The TAA requires that products be substantially transformed in the U.S. into new articles of commerce. The NMR under FAR 52.219-33, by contrast, requires that a small business supply end items manufactured, processed or produced by small businesses in the U.S. or its outlying areas.
• The EO does not clarify the extent of required review, so contractors with any form of country-of-origin requirements should prepare for potential compliance audits. For example, a contractor selling on the GSA or Veterans Affairs (VA) Schedules and also on set-aside IDIQs or delivery orders should be prepared to address country-of-origin inquiries under both the TAA (which applies to Schedule contracts but not small-business set-aside contracts) and the BAA (which applies to small business set-aside contracts).
• Other examples include predominantly iron or steel products which, depending on their use, may be subject to 1) the BAA, which limits foreign iron or steel content to less than 5 percent of total component cost, or 2) the Build America, Buy America Act (BABA), which requires construction materials to be "produced in the United States," meaning all manufacturing processes occur domestically. Contractors supplying iron or steel products under both regimes should be prepared to substantiate compliance with all applicable standards.

Heightened Enforcement Risk and False Claims Act Exposure

The EO signals a strong enforcement posture and outlines two primary repercussions where an agency determines that a contractor has misrepresented a product's American-origin status.

• First, the relevant agency is directed to remove the affected products from government procurement availability, which could mean removing or blocking items from contract vehicles such as GSA or VA Schedules or other government-wide purchasing vehicles and their platforms.
• Second, the EO instructs agencies to refer contractors or vendors found to have misrepresented origin claims to the U.S. Department of Justice (DOJ), which may pursue enforcement under the False Claims Act (FCA). FCA liability can arise where a contractor knowingly submits or causes the submission of false or misleading claims for payment to the government. In this context, inaccurate origin certifications or representations tied to federal sales could form the basis of an FCA investigation or enforcement action.
• FCA liability can carry significant financial consequences, and the government's recent enforcement activity underscores the seriousness of this risk. By statute, the FCA can impose up to treble damages – three times the government's actual loss. In addition, violators must pay mandatory penalties – currently set at a minimum of $14,308 and a maximum of $28,619 – for each false claim or invoice submitted. The following examples illustrate recent growth in FCA risk:
  • FCA settlements and judgments exceeded $6.8 billion in fiscal year 2025 – a record high.
  • 1,297 qui tam whistleblower³ lawsuits were filed in the same year – the largest number on record.
  • In September 2025, DOJ unsealed a 27-count criminal indictment against two Colorado companies and three executives accused of importing Chinese-made forklifts, rebranding them, removing foreign-origin markings and falsely certifying compliance with domestic sourcing requirements in federal registration systems.
• Contractors may also face suspension or debarment under FAR 9.406‑2(b)(1)(iii) if they knowingly affix a false "Made in America" label. Suspension or debarment renders the contractor ineligible in the System for Award Management (SAM) and bars the company government-wide from new awards, contract renewals or extensions, and approved subcontracts.
• Contractors may also be suspended or debarred where the agency believes the contractors failure to comply with the country-of-origin requirements also reflects a lack of business integrity. This is customarily invoked by the government where a contractor's behavior, prior to or after litigation, demonstrates a contractor's lack of business integrity.

Be Aware of Parallel FTC Scrutiny of Consumer Claims

The FTC has signaled increased scrutiny of consumer-facing origin claims. In July 2025, the agency declared "Made in the USA Month," aimed at ensuring that products labeled or advertised as American-made are truly "all or virtually all" produced in the U.S. The FTC also issued warning letters to companies accused of misleading American-origin marketing and sent notices to major online marketplaces regarding allegedly deceptive origin claims by third-party sellers.

Limited Indication of a Remediation Framework

One notable aspect of Section 2(d) is the apparent absence of a remediation pathway. The EO's language suggests a direct escalation path:

• Verification → Finding of misrepresentation → Product removal → DOJ referral
• Though agencies may still exercise practical discretion in how reviews are conducted and findings are interpreted, the structure of the EO signals an intent to treat inaccurate origin claims as serious compliance failures rather than technical procurement errors.
• If agencies interpret the EO strictly, contractors may not be afforded the opportunity to correct or clarify deemed inaccurate origin representations before severe enforcement consequences are triggered.

In sum, contractors should exercise increased vigilance. Agencies are now expected to verify, rather than simply accept, American‑origin claims – particularly on GSA or VA Schedules, GWACs and other government-wide vehicles that may not have been audited with the type of scrutiny now required for country-of-origin claims. The GSA, which has been at the forefront of TAA compliance efforts, likely will roll out enhanced verification for MAS‑listed products. The takeaway is simple: Origin certifications are no longer "check‑the‑box." Contractors should assume those representations will be scrutinized pre-award and post‑award and always be audit‑ready.

Recommendations for Federal Contractors

• Audit Existing Certifications. Contractors should review their contracts to determine which regime(s) apply and review all BAA, TAA and country-of-origin certifications in SAM.gov, GSA Advantage listings and contract proposals, as applicable, to confirm accuracy. Given the EO's periodic verification mandate, stale or inaccurate certifications are now a live enforcement risk.
• Map Supply Chains. For each product sold to the government with a domestic-origin claim, contractors should trace component sourcing and manufacturing to confirm that the product actually meets the applicable BAA/TAA requirements. The forklift indictment illustrates that superficial "final assembly" in the U.S. does not establish domestic origin if the product was not "substantially transformed" in the U.S.
• Lower-Tier Certifications. Contractors in the federal government contract supply chain should require, on a periodic basis, that their lower-tier suppliers certify the country-of-origin for each product being resold to the federal government.
• Distinguish BAA/TAA/BABA/NMR Compliance from FTC "Made in USA" Compliance. A product may satisfy the BAA's domestic component cost test but fail the FTC's "all or virtually all" standard and vice versa. Contractors selling products to government and commercial customers should ensure their claims are calibrated to the applicable standard(s) in each context.
• Train Personnel. Procurement, contracts, marketing and e-commerce teams should understand the different standards and consequences of misrepresentation. The FCA's "knowingly" standard includes "deliberate ignorance" and "reckless disregard" – not just actual knowledge. Careless certifications submitted without verification can trigger FCA liability even absent any intent to deceive.
• Rigorously Document and Maintain Records. Companies should maintain country‑of‑origin records and determinations. Key support includes, but is not limited to, certificates of origin, supplier contracts, technical product specifications, records of transformation or processing, detailed bills of materials, manufacturing flowcharts and labor cost accounting records.
• Prepare for Voluntary Self-Disclosure. If a review uncovers past misrepresentations, contractors should evaluate whether voluntary self-disclosure is appropriate. Companies typically receive significant credit for voluntarily, timely self-disclosures, as well as internal investigation and remediation.
• Monitor for New Rulemaking. The EO directs agencies with country-of-origin labeling oversight to consider promulgating new regulations in consultation with the FTC to ensure "consistent guidance" on voluntary country-of-origin labeling. Contractors should track these rulemaking proceedings, as they may create new labeling standards, procedures or safe harbors.

Holland & Knight's Government Contracts Group will closely monitor the implementation of this EO and continue to provide timely analysis. For more information on navigating "Made in America" compliance matters, contact the authors.

Notes

¹ These contracts are administered by GSA and VA and are typically not subject to the BAA because their dollar value triggers a Trade Agreements Act (TAA) waiver for the contracts as a whole, unless the procurement is set aside for small businesses.

² The TAA waives the BAA where the dollar value of a procurement of supplies exceeds $174,000. The TAA waiver applies to construction where the construction contract exceeds $6,683,000. FAR 25.402(b).

³ A qui tam whistleblower, or "relator," is any person who brings a civil action on behalf of "the person and for the United States Government" and can be an employee, consultant or competitor. 31 U.S.C. § 3730(b)(1).

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.