April 21, 2021

New „Executive Order“ makes changes to Buy American Regulations

In Executive Order (“EO”) No. 14005, dated January 25, 2021, President Biden directed several changes to regulations issued in connection with the Buy American Act of 1933, which sets for the policy preference for Federal Agencies to purchase American made products. Under certain circumstances, Federal Agencies may “waive” the buy American requirement. To better control the use of such waivers, the EO establishes a “Made in America Office” (“MAO”), which is charged with overseeing the use of such waivers. The EO requires Federal Agencies (for example, the Department of Defense), to provide the MAO with the waiver application for the planned contract, to include notice of the planned solicitation and a detailed justification for the use of non-American product. The waiver application submitted by the Agency and the decision on the application by MAO will be made available to the public via the world wide web.

In another change concerning the Buy American Act of 1933, the EO calls for replacement of the “component test” to determine whether a product is considered “american” with a “value added” approach, under which value is determined based on the value added to the product through U.S. based production or job supporting economic activity.

A further change concerns updates to the “List of Non-available Articles”, which is published under 48 CFR § 25. This list contains products that are not mined, produced or manufactured in the United States in sufficient and reasonably available commercial quantities with a satisfactory quality. Updates to the list must now be made in consultation with the Secretary of Commerce and the Director of the Made in America Office.