Biden-Harris Administration will increase American-made content in federal purchases and bolster critical supply chains
The President believes that when we spend American taxpayers’ dollars, it should support American workers and businesses. In his first week in office, 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 his 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 fulfill 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.
Today, the President is announcing another significant step in fulfilling his commitment: the most robust changes to the implementation of the Buy American Act in almost 70 years. His proposal 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.
With $600 billion in annual procurement spending, almost half of which is in manufactured products from helicopter blades to trucks to office furniture, the Federal government is a major buyer in a number of markets for goods and services, including the single largest purchaser of consumer goods in the world. Leveraging that purchasing power to shape markets and accelerate innovation is a key part of the Biden industrial strategy to grow the industries of the future to support U.S. workers, communities, and firms. 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%. This proposal would close a problematic loophole in the current regulation, while also allowing businesses time to adjust their supply chains to increase the use of American-made components. If adopted, this change would create more opportunities for small- and medium-sized manufacturers and their employees, including small and disadvantaged enterprises, from all parts of the country. To support this work, the Small Business Administration has created a new manufacturing office in its federal contracting division.
- Strengthens domestic supply chains for critical goods with new price preferences. 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 new reporting requirement would bolster compliance with the Buy American Act and improve data on the actual U.S. content of goods purchased. More complete and accurate data would be used to target future improvements to support America’s entrepreneurs, farmers, ranchers, and workers— and along the way, create good jobs and resilient communities.
THE BIDEN ADMINISTRATION IS ALREADY BUYING AMERICAN
The Biden-Harris Administration has not waited for new rules to go into place in order to Buy American. At his first Cabinet meeting, the President made it clear that supporting U.S.-based manufacturing through procurement was a top priority. Agencies have delivered.
As part of the whole-of-government initiative, today, agencies are highlighting more than $2 billion in new purchases to support the manufacturing of innovative technologies and products in America.
- The Department of Energy acquired new electric vehicles for its fleet, all of which were manufactured in the US or have batteries that were produced at US facilities. The Department will also purchase steel products, advanced computing, and hazardous materials isolation equipment manufactured in Texas, Iowa, Idaho, Louisiana, South Carolina, Ohio, Connecticut and Wisconsin.
- The General Services Administration (GSA) worked with 8(a) small business to procure energy efficient technologies for federal facilities. These contracts are a part of GSA’s Green Proving Ground program, which tests emerging technologies at federal facilities in order to help them scale and become viable in the market.
- The Department of Defense funded prototypes to sustainably source critical minerals and to create a new training hub with the Department of Energy to increase the productivity of the U.S. machine tool base.
- NASA added new project recipients to its programs to rapidly acquire lunar delivery services from American companies to further U.S. capabilities for science, exploration, or commercial development of the Moon and to demonstrate a commercially-developed habitable space station elements with the potential to transition to free-flying, self-sustaining commercial destinations in low earth orbit.
- The Office of Naval Research issued Phase 1 awards for a Small Business Innovation Research (SBIR) project to accelerate the pace, security and quality of autonomous vehicles.
- The Department of Labor purchased $1.5 million of Made in America products, spanning a range of needs from office furniture to state of the art testing equipment to ensure America’s mines and other workplaces are safe.
- The Army Corps of Engineers Mississippi Valley Division issued over $42 million in new contracts to help make communities more storm and flood resistant and to improve the flow of goods along the Mississippi River to support the region’s manufacturers.
These purchases are aligned with the President’s commitment in his Build Back Better legislative proposal to strengthen R&D, manufacturing and grow jobs in the industries of the future, including through a $48 billion commitment to federal procurement of clean energy and clean technologies.
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.
Beyond direct purchasing, the Biden-Harris Administration is making investments in workforce training and small business supports that will bolster the President’s Made in America agenda. As noted above, SBA has created a new manufacturing office to help small manufacturers access federal contracts, financing, and business development support. The office will coordinate activities across the Agency in response to the President’s Executive Orders on Made-in-America, supply chain resiliency, and racial equity.
The Department of Labor invested $430 million in workforce training and apprenticeships in June this year, including grantees focused on bolstering the domestic manufacturing workforce. The funding supports programs across the country, including in Colorado, Texas, California, Michigan, Idaho and Nevada. These investments will ensure that as the manufacturing sector expands, workers will be able to transition quickly and succeed in good-quality jobs.