The President believes that when we spend American taxpayers’ dollars, it should support American workers and businesses. President Biden signed Executive Order 14005, ensuring the Future is Made in All of America by All of America’s Workers, launching a whole-of-government initiative to strengthen the use of federal procurement to support American manufacturing.
Since January, the Biden-Harris Administration has made significant progress implementing the President’s vision. In April, the President opened a new Made in America Office. The Office reviews proposed waivers of Made-in-America laws and helps agencies use taxpayer dollars to support U.S. manufacturing.
The Made in America Office issued new waiver guidance to fulfil the President’s commitment to scrutinize and reduce waivers to Made-in-America laws. The guidance lays out a whole of government agenda to maximize the use of taxpayer dollars on domestic products and services to strengthen our industrial base and create good-paying, union jobs for Americans.
The President is announcing another significant step in fulfilling his commitment, with a proposal that would increase U.S. content in the products the federal government buys and support the domestic production of products critical to our national and economic security.
As the pandemic has demonstrated, federal procurement can strengthen the resiliency of domestic supply chains, and reduce the risk of Americans being adversely impacted by the actions of competitor nations during a time of crisis.
Today’s Notice of Proposed Rulemaking marks just the first set of proposed reforms to procurement policy under the Biden-Harris Administration to ensure taxpayer dollars help America’s businesses compete in strategic industries and help ensure America’s workers thrive.
The proposed rule directs the following changes to strengthen Buy American requirements:
- “Make Buy American Real” and close loopholes by raising the domestic content threshold. The Buy American statute says products bought with taxpayer dollars must “substantially all” be made in the U.S. However, today, products could qualify if just 55%–just over half—of the value of their component parts was manufactured here. The NPRM proposes an immediate increase of the threshold to 60% and a phased increase to 75%.
- As the pandemic made clear, supply chain disruptions can impact the health, safety, and livelihoods of Americans—leaving us without access to critical goods during a crisis. Some products are simply too important to our national and economic security to be dependent on foreign sources. The NPRM proposes applying enhanced price preferences to select critical products and components identified by the Critical Supply Chain review, mandated under E.O. 14017, and the pandemic supply chain strategy called for under E.O. 14001. These preferences, once in place, would support the development and expansion of domestic supply chains for critical products by providing a source of stable demand for domestically produced critical products.
- Increases transparency and accountability in Buy American rules: Reporting challenges have hampered implementation of Buy American rules for decades. Currently, contractors only tell the government if they meet the content threshold rather than reporting the total domestic content in their products. The NPRM proposes to establish a reporting requirement for critical products.
The President’s COVID-19 response has also advanced his Buy American strategy by increasing U.S. capacity to produce critical products. In March, the Department of Defense and Department of Health and Human Services procured over $22 million in American-made cloth face masks for communities hard-hit by the pandemic. In May and June, the Department of Defense purchased more than $1.8 billion in U.S.-made COVID treatment and testing supplies.
In addition, since February, we have invested more than a billion dollars in expanding American production capacity for critical pandemic response throughout the healthcare supply chain to meet current and future needs.
The President’s Build Back Better agenda will continue this work through its call for $30 billion to prevent and prepare for future pandemics.