The full impact of President Biden’s “Made in America” executive order compelling federal contractors to purchase more U.S.-manufactured products won’t be clear for some time, according to experts.
Five days after taking office, Biden issued an executive order on January 25 to push federal agencies to buy more products made in the United States. It builds on current laws—the Buy American and Buy America statutes, passed in 1933 and 1982, respectively. The federal government spends about $600 billion annually in contracting and current laws giving preference to American companies are not always followed and haven’t been “substantially updated since 1954,” said a fact-sheet from the White House.
“The [executive order] directs the [Federal Acquisition Regulatory Council] to consider proposing rules to tighten up the [Buy American Acts] requirements,” so “there are no immediate changes,” said Adelicia Cliffe, partner at the law firm Crowell and Moring, who is part of the firm’s government contracts and international trade group. This is because any new rules will have to go through the formal rulemaking process.
Specifically, the executive order said that within 180 days, the FAR Council should consider: replacing the “component test” (which says that over 50% of a product’s cost must have a domestic origin), increasing the numerical threshold for domestic content requirements for construction materials and end products, and increasing the price preferences for domestic construction materials and end products.