President Joe Biden has signed an executive order that seeks to increase purchases of products made in the United States, chiefly by tightening rules around federal procurement and giving the government a bigger role in supporting U.S. businesses.
Biden’s action on Jan. 25 is meant to boost federal purchases of American-made goods by making it harder for federal agencies to buy imported products, including by raising local-content requirements, cracking down on waivers that allow exemptions to current Buy American Act rules, and creating a new senior role at the Office of Management and Budget to oversee the implementation of the new efforts.
The White House said in a statement that Biden’s directive modifies the definition of American-made products, raising the domestic content threshold for a purchase to qualify under existing provisions of the Buy American Act, a law adopted in 1933 to require the government to prefer U.S.-made products in its purchases. Besides raising the percentage of a product that must be made in the United States to qualify under those rules, Biden’s order also raises the price preference for domestic goods in government procurement.
This gives federal agencies more leeway in opting to buy more expensive goods from American-based suppliers rather than having to choose cheaper, imported alternatives.
Seeking to further reduce federal reliance on imports, Biden’s action also aims to reduce waivers from existing procurement rules. The order calls for tighter oversight of the waiver application process and establishes a central review of agency waivers. It also directs the General Services Administration to publish waivers on a publicly available website.
The order also requires government agencies to report on their implementation of Made in America laws and calls on agencies to make recommendations for achieving Made in America objectives, including by potentially flagging services that could be added to the mix, in addition to the current manufacturing industries, as the Buy American Act laws now pertain only to goods.
Biden’s action also directs agencies to use the Manufacturing Extension Partnership, a national network that supports small and medium-sized manufacturers, to help agencies connect with new domestic suppliers.
“With this order, President Biden is ensuring that when the federal government spends taxpayer dollars they are spent on American-made goods by American workers and with American-made component parts,” the White House said in a statement.
The federal government currently spends about $600 billion on contracting per year.